Tesla reports wider Q2 deficit than expected but predicts Model 3 boost

Tesla reports wider Q2 deficit than expected but predicts Model 3 boost

Tesla reports wider Q2 deficit than expected but predicts Model 3 boost

Tesla reported a loss of $717.5 million, or $4.22 per share, for the second quarter ended June 30, compared with a loss of $336.4 million, or $2.04 per share, a year earlier.

While Tesla so far has been mostly losing money at a growing pace, Musk reiterated on Wednesday he expects the company to become profitable as soon as the next quarter after it boosts production of its Model 3 vehicle, envisioned for mass marketing.

The all-electric automaker said that it had made $4 billion in auto, battery and leasing revenue during the second quarter of the year, a sharp increase over the same quarter last year because it had finally introduced its newest Model 3 sedan.

Elon Musk didn't help things last May during the first quarter earnings call when he called one analyst "boneheaded" and "boring" for asking hard questions about the finances of Tesla. Analysts polled by FactSet expected a $US2.88 loss per share. In an update last June, Musk stated that software V9.0 would include Autopilot's first Full Self-Driving features.

During the second quarter, Tesla laid off 9 percent of its workforce as it worked toward Musk's promise of making money. The stock was down 3.4 per cent through Wednesday's session.

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The Model 3 is Tesla's most affordable vehicle with a base price of $35,000, and analysts consider it key to the company's goal of cracking the mainstream auto market.

Musk also stated that Tesla was hiring video game developers to build games which integrate with the Tesla's touchscreen, the driver's smartphone, and the vehicle itself. The company is also planning a new factory in China that will require significant funding, which the company says it will raise through local debt. Tesla expects its Model 3 gross margins to "grow significantly" in its third quarter. Some analysts have questioned whether Tesla can maintain a higher rate of production after rushing to meet an internal target to build 5,000 Model 3s per week by the end of June.

"From an operating plant standpoint, from [sic] onwards I really want to emphasize our goal is to be profitable and cash flow positive for every quarter going forward", Musk said. Tesla projected total 2018 capital spending at just below $US2.5 billion.

Elon Musk responded on Twitter, saying he will "send Einhorn a box of short shorts to comfort him". That's substantially less than the 2017 level of $US3.4 billion.

After quietly upgrading its semi-autonomous driving suite, Autopilot, almost a year ago, Tesla has been working hard on its next-generation hardware.

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