Tesla burns $US740m in cash on way to loss

2017 Tesla Model X

2017 Tesla Model X

Tesla shares rose 5% in after hours trading despite the $717.5m loss, as the company forecast additional increases to its production capacity and profitability in the second half of the year. In the previous year, Tesla has come under scrutiny for its factory conditions, vehicle production, treatment of employees, odd cost cutting measures, and CEO Elon Musk's fitful interactions with critics.

Tesla said Wednesday that its lone car-making factory in Fremont, Calif., had made 5,000 Model 3 sedans a week multiple times during July and should be able to continue at that rate through the third quarter. The compay reported an adjusted net loss of $3.06 per share, more than analysts expected.

It expects to build a total of up to 55,000 Model 3s in the third quarter, which works out to an average weekly rate of 4,230, at a roughly 15 percent gross margin, rising to 20 percent in the fourth quarter. "I hope you'll accept my apology", he said directly RBC Capital caller Joseph Spak. Analysts polled by FactSet expected a $2.88 loss per share.

Just as the flare-up contributed to a smackdown in Tesla's stock in May, Musk's contrite tone this time around contributed to today's real-time rise in prices.

"We aim to increase production to 10,000 Model 3s per week as fast as we can", Musk wrote in the Wednesday letter, though he offered no estimated timeline.

Weather: Met Office updates thunderstorm warning for Nottingham
The mercury is set to hit 35C on Thursday and rise further to 37C on Friday, triggering a thunderstorm warning into the afternoon.

One thing that stood out and caught investors' attention is the fact that the company's Model 3 vehicle helped set a new record: a total revenue of United States dollars 4 billion in one quarter.

"No production target is more important than sustained quality, which is why every vehicle we produce goes through a thorough set of measurements and tests before it reaches the customer", it said.

Free cash flow, a key metric of financial health, narrowed to negative $739.5 million in the second quarter from negative $1 billion in the first quarter, excluding costs of systems for its solar business.

Tesla is also adding a number of other fun features to its vehicles, including "party" and "camper" modes for its Model S, 3, and X vehicles. "There's obviously no excuse for bad manners, and I was kind of violating my own rule that regard", Musk told Sacconaghi.

After quietly upgrading its semi-autonomous driving suite, Autopilot, almost a year ago, Tesla has been working hard on its next-generation hardware. The company has never turned an annual profit and has had only two profitable quarters since becoming public in 2010.

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.