Tesla burns $739.5 million in cash on way to record 2Q loss

02 August, 2018, 16:35 | Author: Teresa Adams
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Tesla Inc burned through $US739.5 million ($A999 million) in cash in the second quarter, paving the way for the company to record a $US717.5 million net loss as it continues to crank out electric cars.

"I was impressed with their negative free cash flow", said David Kudla, CEO of Mainstay Capital Management, which is betting against Tesla.

While the electric auto maker has failed to generate profit for yet another quarter, the trend has not apparently discouraged the market, with Tesla stock gaining 11 percent and trading at $334.18 per share after the statement was released. While it's no secret that the Model 3 ramp-up got off to a much slower start than Tesla initially promised, the company during the last week of June did manage to boost Model 3 production up to 5,000 units/week.

The net loss more than doubled from the same quarter a year ago, and was slightly larger than the first quarter.

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The business world is looking so closely at Tesla's cash levels because Tesla worked mightily to reach its long-sought milestone of making 5,000 Model 3s in a week.

"In July 2018, Model 3 not only had the #1 market-share position in its segment in the US, it outsold all other mid-sized premium sedans combined, accounting for 52% of the segment overall", Tesla's earnings press release stated.

Excluding items, Tesla reported a loss of $2.45 per share, compared with expectations of a loss of $2.92. Shares of Tesla have risen 11% to $$332.99 in after-hours trading.

On Twitter, Elon Musk asked for developers to consider joining Tesla to make games optimized for its vehicles.

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Tesla projected 2018 capital spending of slightly less than $2.5 billion, compared to $3.4 billion previous year. Last quarter, the company reported about $3.4 billion in total revenue (automotive and energy combined) and a non-GAAP share loss of $3.35 per share.

The automaker completed a broad restructuring during the quarter, including layoffs affecting 9% of Tesla's employees. Tesla also said it wants to churn out 10,000 Model 3s per week "as fast as we can".

Tesla chief executive, Elon Musk, has announced the Tesla Model 3, Model S and Model X will soon receive an over-the-air update that will add a "Party & Camper mode" to their infotainment repertoire. Tesla says it built 53,339 cars in the second quarter, of which 18,449 were Model 3s.

Tesla also said it was working on a new version of its Autopilot semi-autonomous software that would have greater safety features. Tesla has never posted an annual profit and has only had two profitable quarters since going public in 2010.

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