Carvana Can’t Afford to Drive Away Business

Online used-car retailer Carvana is doing what it can to minimize its cash burn. How long can it continue doing so without driving away customers?

Carvana last week reported that it sold 79,240 used cars in the first quarter—25% fewer than a year earlier. This is a direct result of what Carvana is doing to stop its cash bleed: reducing operating expenses and inventory. The first quarter marked the fourth consecutive quarter of Carvana decreasing both on a sequential basis.