Tesla lost $717 million and issues the usual BS apologies and distraction smoke
Tesla reported another big loss for the second quarter.
The $717.5-million loss was larger than analysts had expected, slightly higher than the previous quarter’s $709-million loss and more than double the $336.4 million loss in the same quarter a year earlier. The company reiterated its dreams to achieve profits in the third and fourth quarters and beyond, just like it has done for years without ever delivering.
One short seller said he’ll stick to his bet that the company’s stock is grossly overvalued.
“Tesla is a structurally unprofitable business,” said Mark Spiegel of Stanphyl Capital. “Their expenses are way too high to reach consistent profitability.”
So far this year, the company has lost more than $1.5 billion, while its cash pile has fallen from $3.5 billion to $2.8 billion
The Model 3 has been plagued by production problems caused mainly by Tesla’s overly aggressive approach to automation at its Fremont, Calif., factory.
In a conference call after the earnings release, Musk assured stock analysts that the fixes to the assembly line are proceeding apace but few believe him.
The company aims to produce 6,000 Model 3s a week by late this month, and then “increase increase production over the next few quarters beyond 6,000,” the letter said. “We aim to increase production to 10,000 Model 3s per week as fast as we can.”
The company produced 52,339 vehicles in the second quarter and delivered 40,708 — leaving 12,631 mostly Model 3s still to find their way to customers. Thousands of Model 3s are being stored in large lots outside Stockton and near Hollywood Burbank Airport. The company said in the letter that its “delivery pattern should smooth out in the next two quarters.”
The key to turning profits will be both added sales and cost-cutting. This year Musk said Tesla will trim back 2018 capital spending from a planned $3.4 billion to $3 billion. In the investment letter, the company reduced that even further, to $2.5 billion.
That means delayed capital spending on upcoming crossover vehicles, pickups and semi trucks previously announced by Musk.
Musk had said Tesla doesn’t need to raise new debt or equity capital for the rest of the year. Bloomberg reported Wednesday that Tesla is searching for a Chinese partner to help finance a planned $5-billion manufacturing complex in China. Tesla is likely to borrow money from Chinese lenders, and China will play a large part in Tesla’s growth, Musk said.