Tesla's biggest net loss helps meet production target

2017 Tesla Model X

2017 Tesla Model X

The company has yet to turn a profit but this quarter's loss is more than twice as high as in the second quarter previous year. Then, Musk told an analyst the company would start paying off its debts.

VideoTesla soared in late trading after second-quarter revenue beat expectations and the cash burn slowed. "As a result, we expect to hit this rate sometime next year".

Elon Musk may have been on to something when he said Tesla Inc. was becoming a real vehicle company. He and chief financial officer Deepak Ahuja wrote that they expected Tesla to build as many as 55,000 Model 3s this quarter, which would almost double output from the three months that ended in June. Musk and CFO Deepak Ahuja admitted that even production of the auto was plagued with problems; Tesla launched a new production line in a massive tent, shuffled its worker base, and worked round the clock to hit the 5,000-Model 3s-a-week target. It now says production is rising, with the goal of 6000 per week by the end of August.

More news: Samantha Markle Fires Back at Chrissy Teigen, Calling Her 'Pudgy Airhead'
More news: Three dead in Zimbabwe as president blames opposition for election violence
More news: No evidence Islamic State responsible for Toronto attack

Mr Musk said he expects the company to achieve sustained quarterly net profits from now on, barring an unforeseen event, supplier problems or economic downturn.

"After three quarters where investors have been in the dark with respect to estimating Model 3 volumes and margins, Q2 felt like there might finally be some light at the end of the tunnel", Evercore analysts wrote.

The company said it has cut back on capital spending by changing its strategy to produce the Model 3 on existing assembly lines, one in a giant tent, rather than adding all-new lines. That's substantially less than the 2017 level of $US3.4 billion. Adjusted for stock-based compensation, the company lost $US3.06 per share. He has run into trouble for snubbing Wall Street analysts to disparaging journalists critical of the company, and also for recently abusing a British caver who helped rescue 12 boys from a flooded Thailand cave. Analysts polled by FactSet expected a $US2.88 loss per share. Tesla said its capital expenses would be slightly below $2.5 billion in 2018, less than last year's $3.4 billion. The CEO carried out a reorganization last quarter and announced that 9 per cent of the company's workforce would be dismissed. Last quarter, the company kept stockholders happy by mitigating losses and promising profitability in the third and fourth quarters.

Recommended News

We are pleased to provide this opportunity to share information, experiences and observations about what's in the news.
Some of the comments may be reprinted elsewhere in the site or in the newspaper.
Thank you for taking the time to offer your thoughts.