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


Model 3 gross margins turned slightly positive in the quarter, and the company reaffirmed plans to be profitable in the third and fourth quarters. Tesla offered generally positive guidance, including its forecast to be cash flow positive, for the second half of the year, and share prices spiked 9 percent in after-hours trading. Tesla only had to burn through $430 million worth of its unrestricted cash reserves. Embattled CEO Elon Musk promised to plug the loss gap with a massive production increase.

Back then, Musk derided analysts for asking about capital needs, dismissing their queries by calling them "boring, boneheaded questions" and then taking a series of more sympathetic questions from a small shareholder who was well-informed about Tesla and bullish on its future. The call triggered a stock sell-off and raised questions about Musk's behavior.

"It's really kind of a mind-blowing leap forward", Mr Musk said on a call with financial analysts. With another caller he said, "that was not right", and "I hope you accept my apology". It expects to produce between 50,000 and 55,000 Model 3s this quarter.

The company said it maintained its level of production, producing 5,000 Model 3s in a week multiple times in July. It now says production is rising, with the goal of 6,000 per week by the end of August.

"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 said in a statement reporting earnings.

Cash from selling the Model 3, which starts at $35,000 but runs far higher with options, is key to holding off more borrowing and turning a profit.

Tesla incinerated more than $400 million of greenbacks in the quarter to June. If he manages to tow Tesla out of the red by the end of 2018, there's a chance the figure won't dip below the $1.5 billion or so needed to keep the factory gates open, as estimated by Citigroup.

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. On an adjusted basis, Tesla lost $3.06 per share, missing the consensus estimate of $2.92. But with low cash reserves, investors have anxious that Tesla would need to borrow more money to keep the company afloat.

Tesla management has previously predicted that it would turn a profit sometime in the third quarter.

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.