Tesla Posts $717.5M 2Q Loss, Burns $739.5M Cash

Aug 02, 2018, 08:48
Tesla Posts $717.5M 2Q Loss, Burns $739.5M Cash

Tesla posted a $743 million loss in the second quarter, increasing the pressure on the beleaguered automaker to ramp up its production in order to stay afloat.

Tesla's stock was up more than 10% at one point in after-hours trading. Tesla only had to burn through $430 million worth of its unrestricted cash reserves.

Investors appear to be eating it up, the newer, humbler Musk.

The Model 3 is Tesla's first auto that's aimed at a more mass-market audience, and it debuted to great fanfare, with thousands clamoring to put down $1,000 reservations for the vehicle. The call triggered a stock sell-off and raised questions about Musk's behavior. Musk apologized to the diver. "Hope you accept my apologies".

It reached its goal of making 5,000 Model 3 sedans a week "multiple" times in July, and aimed to produce 50,000 to 55,000 in the third quarter. "It's fair to say that no production ramp of any other product has been as closely watched and debated as that of Model 3". It had ended the first quarter with $3.2 billion in cash after spending $656 million in capital expenses.

"It's really kind of a mindblowing leap forward for a manufacturing company", Musk said. Ultimately, the electric auto manufacturer wants to see its factories churning out 10,000 units per week by the end of this year, doubling the current rate of production.

"The projection of profitability in the second half of the year is admirable, but is based on selling a far more expensive version of the Model 3 then many consumers had expected", Rebecca Lindland, executive analyst at Kelley Blue Book, said in an emailed statement. That's substantially less than the 2017 level of $3.4 billion. Investors on Wall Street, meanwhile, were anticipating revenue to fall somewhere in the $3.791 billion range and a loss of $2.90 per share.

The report notes the company expects that revenue to boost its available cash through the end of the year. Tesla reported a record net loss of $718 million, which was larger than what analysts had been forecasting.

Tesla also said it's working on a new version of its Autopilot semi-autonomous software that will have greater safety features.

The company laid off nine percent of its workforce in the second quarter as it attempted to become profitable.

Tesla management has previously predicted that it would turn a profit sometime in the third quarter. Additionally, it seems Tesla is keen to get unique game content into its cars, as Musk also tweeted job opportunities for game developers.

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