Published: Thu, August 02, 2018
Finance | By Cynthia Curry

Tesla cuts losses on Model 3 sales, Musk promises profits next quarter

Tesla cuts losses on Model 3 sales, Musk promises profits next quarter

That loss is close to double the $336.4 million ($454.4 million) it lost during the first quarter of 2018, although total revenue rose from US$2.79 to US$4.0 billion. Tesla blames production difficulties in this area on hundreds of robotic lifters that bring components to the line to be attached to the painted metal body.

The overall performance pleased investors enough to send Tesla stock up more than 11 percent in after-market trading, where it topped out above $330 per share.

Although Tesla is burning through less cash, it continues to lose money. On an adjusted basis, Tesla lost $3.06 per share, missing the consensus estimate of $2.92. Compared with the first six months of a year ago, the company's loss was up from about $800 million to more than $1.5 billion. "One example is TSLA's reiterating a Model 3 production rate goal of 6,000 units per week by late August, with a more vague time frame to reach production of 10,000 units per week". "In the second half of 2018, we expect, for the first time in our history, to become both sustainably profitable and cash flow positive".

CEO Elon Musk said Wednesday that the company's custom-built chip for handling autonomous driving is almost ready.

Tesla delivered more of its Model 3 cars in the most recent quarter, helping to boost revenues.

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The losses were exacerbated by Tesla's 29% gains last quarter - decimating Einhorn's short position in the stock - making it his "second biggest loser" for the six-month period.

Musk made waves on the May call by cutting off questions and calling them "boring" and "boneheaded", which was followed by a drop in the automaker's shares the following day.

More recently, he drew fire for suggesting in a tweet that a British caver who participated in the rescue of a youth soccer team from a flooded cave in Thailand was a pedophile.

Musk offered his apologies directly to Toni Sacconaghi from Bernstein and Joseph Spak of RBC Capital Markets, the analysts he brushed off in May. But Musk said numerous trade-ins it received were mass-market vehicles, including the Toyota (7203.T) Prius and Honda (7267.T) Accords and Civics.

Einhorn also said that he was pleased his Tesla lease had ended and that he was excited to get the I-Pace, which is Jaguar's first electric SUV and powers Waymo's fleet of self-driving taxis. The company has never turned an annual profit and has had only two profitable quarters since becoming public in 2010.

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