Tesla Reports Record $717.5 Million Net Loss in Second Quarter

02 August, 2018, 16:32 | Author: Salvatore Jensen
  • Tesla is now the king of the mid-range cars

Electric vehicle maker Tesla burned through $US739.5 million ($1 billion) in cash last quarter, paving the way to a company record $US717.5 million net loss as it cranked out more electric cars.

"Our goal is to be profitable and cashflow positive in every quarter going forward", Musk said in the earnings call, allowing that there may be some quarters in which the company pays back debt, which could interrupt that trend.

Tesla reported a loss of $3.06 a share, missing analyst forecasts for a loss of $2.88 a share, on sales of $4 billion, which was just ahead of predictions for $3.99 billion. Musk repeated his view that profitability is just around the corner, thanks to a ramp-up in production of Tesla's Model 3 electric vehicle. In Q2, Tesla delivered a total of 40,768 cars, out of which the Model 3 accounted for 18,449 deliveries. The call triggered a stock sell-off and raised questions about Musk's behavior.

Beyond operating costs, Tesla has paired down an initial $3.4 billion capital expenditure estimate for the year to a slimmer $2.7 billion. At the time of writing, Tesla shares are up in after-hours trading after once again closing north of $300.

On Twitter, Elon Musk asked for developers to consider joining Tesla to make games optimized for its vehicles.

Tesla said demand for the Model 3 remained strong.




"We like the more muted tone of the company's outlook, with the absence of unnecessary new stretch goals", CFRA analyst Efraim Levy wrote in a note to clients. Analysts polled by Bloomberg expect the company to report an adjusted loss of $2.90 per share on revenues of $2.974 billion.

Last quarter, Musk mistreated two analysts by calling their queries about the company's cash needs and Model 3 orders "so dry" and "not cool". "There's obviously no excuse for bad manners, and I was kind of violating my own rule that regard", Musk told Sacconaghi. While Tesla hit the long-delayed target in June, the process put additional strain on the company, forcing it to spend millions to ramp up production.

The company said that it expects to grow at a rapid pace and expects to achieve sustained quarterly profits.

Tesla's website describes upcoming features - including the ability for a vehicle to change lanes without driver input, move from one freeway to another, and exit a freeway near the driver's destination - that are not available in Autopilot's current iteration.

Tesla management has previously predicted that it would turn a profit sometime in the third quarter.

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