Published: Thu, August 02, 2018
Economy | By Shawn Conner

Tesla expects to hit 6,000/week Model 3 production rate

Tesla expects to hit 6,000/week Model 3 production rate

Tesla's finances are so dicey that the largest quarterly loss in the company's history couldn't bring investors down.

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.

CEO Elon Musk said Wednesday that the company's custom-built chip for handling autonomous driving is almost ready. At the time of writing, Tesla shares are up in after-hours trading after once again closing north of $300.

Tesla, which has posted profit only in two quarters since becoming a public company eight years ago, broke another record for quarterly net loss on Wednesday, smashing the previous record of $709.6 million set in the first quarter. Tesla only had to burn through $430 million worth of its unrestricted cash reserves.

And not only was the company's outlook more muted, so was CEO Elon Musk.

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Tesla delivered its 200,000th electric auto - including its more expensive Model S and X vehicles - in July, a threshold which means a $7,500 federal subsidy will remain in place to the end of the year.

In the first-quarter call in May, Mr Musk cut off Mr Sacconaghi for what he called "boring, bonehead" questions and said Mr Spak's questions were "so dry".

He went on to explain he's been worn out lately from working "110, 120 hour weeks". "Hope you accept my apologies".

It reached its goal of making 5,000 Model 3 sedans a week "multiple" times in July, and aimed to produce 50,000 to 55,000 in the third quarter.

Model 3 production continues to ramp up, having finally hit the magic 5,000-Model-3s-per-week target in Q2.

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Cash from selling the Model 3, which starts at $US35,000 but runs far higher with options, is key to holding off more borrowing and turning a profit.

"We aim to increase production to 10,000 Model 3s per week as fast as we can". Tesla projected total 2018 capital spending at just below $US2.5 billion.

Beyond operating costs, Tesla has paired down an initial $3.4 billion capital expenditure estimate for the year to a slimmer $2.7 billion. Analysts polled by FactSet expected a $US2.88 loss per share.

Einhorn, a short seller who had bet against Tesla's stock, also said he would not renew his own lease on a Model S, blaming touchscreen and window problems.

Musk then put his signature optimism on display, saying it was Tesla's goal "to be profitable and cash-flow positive in every quarter going forward".

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