Tech

Tesla reports narrower than expected losses, shares rise

Tesla reports narrower than expected losses, shares rise

Tesla was aiming at producing 2,500 cars a week by March-end but ended up making only 2,270 cars a week in April.

"I think we're really well-positioned", Musk said, for having "ultimately millions of shared, autonomous electric vehicles". "The truth is you're not a real company until you are. That's our focus right now".

How about announcing the location of the Tesla Model Y production "maybe in the last quarter", but not before the end of the year, Musk said, and in a new Chinese Gigafactory to boot? The cash burn could put pressure on the company to borrow more or sell additional shares to raise more cash.

He then took several questions in a row about plans for a self-driving auto network and other long-term projects from the host of a YouTube channel focused on investing, praising the questions as not boring. Analysts polled by FactSet forecast an adjusted loss of $US3.54 per share. Tesla also needs a software platform to manage the ridesharing network.

Tesla did not break out a cash flow calculation as it has in previous quarters. One interesting fact is that Tesla is still losing money on every Model 3 it builds, particularly as it has had to cut back on automation in certain areas of production until it can iron out some kinks.

With bottlenecks in body and battery production since solved, Musk expects Tesla Model 3 production, which averaged above 2,000 units per week before the automaker's planned mid-April shutdown, and topped out at 2,270 per week in the last of those weeks, to reach 3,000 per week within three months.

The Model 3 starts at $35,000 (£25,700) but with options can easily cost more than $50,000 (£36,800).

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"In particular the number of third-party companies we're using has gotten out of control".

But on Wednesday, Musk said manufacturing has actually been improved by taking some robots off the assembly lines.

Musk added that he "appreciates that the government of China will allow full ownership" of such factories, meaning there's a deal afoot to allow Tesla full, 100-percent ownership.

In releasing its quarterly earnings, Tesla reported another massive, though expected loss.

According to the company, if plans go accordingly, Tesla "will at least achieve positive net income excluding non-cash stock-based compensation in Q3 and Q4". Revenue grew by 26 per cent from a year ago to $US3.4 billion.

The giant loss in a critical quarter for the 15-year-old company beat Wall Street estimates. The lowest sales estimate is $2.92 billion and the highest is $3.52 billion. But Tesla's shares nevertheless declined almost 6% in after-hours trading to $283.10. In addition, Moody's downgraded Tesla in March. FDx Advisors Inc. acquired a new position in Tesla in the 4th quarter valued at $203,000. The company expects to spend just under $3 billion in 2018 on less than the $3.4 billion it spent in 2017. "We wonder what spending is deferred and for how long", CFRA analyst Efraim Levy wrote in a note to investors.

This undated photo provided by Tesla shows the Tesla Model 3, which delivers a sporty ride with a premium feel. At one point it had more than 500,000 potential buyers on a waiting list. The target for gross margin is expected to remain at around 25 percent, but Tesla surprised itself by ending up with a significantly higher selling price per vehicle than it had initially projected.


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