Tesla loss grows as it misses sales goals

Andrew Cummings
August 6, 2016

The chief executive officer said on Wednesday that Tesla "just managed to climb out of hell" in June and that now the "production line is humming". The move suggests Tesla is trying to move from being an electric auto company to a broad sustainable energy business. On Wednesday, Aug. 3, 2016, Tesla reports financial results.

Complicated parts, like gull-wing doors and free-standing second-row seats, were also issues.

Tesla said its net loss widened to $US293.2 million, or $US2.09 per share, in the second quarter, from $US184.2 million, or $US1.45 per share, a year earlier. That's mainly because it raised $1.7 billion in May in a secondary stock offering.

The manufacturer said it was still on track to meet its delivery projections of 50,000 for this year on its Model S ans Model X cars.

Tesla stock is now down $1.56 to $225.64. Notably, Tesla had set a target to deliver 80,000 vehicles this year.

Tesla wanted to deliver 17,000 vehicles in the second quarter - a number analysts doubted after previous shortcomings.

It was a turbulent quarter for Palo Alto, California-based Tesla. The company has already received pre-orders of over 400,000 Model 3 cars. Erickson also said that Tesla might look to raise more capital within the next 12 months.

But Musk doesn't consider either vehicle to be the next big Tesla project. Instead it reiterated the total of 373,000 that it released in May. Musk said. "When all of that's lumped together, it can be confusing".

Tesla is also accelerating store openings, and will add a new retail location every four days through Q3 and Q4 of 2016. It now expects to make 500,000 vehicles by 2018, not 2020 as originally planned.

But things took a downward turn later in the quarter. In June, a Tesla Model S collided with a truck while Autopilot was engaged-the first recorded death in a semi-autonomous vehicle. That investigation is ongoing, but Musk insists the system is safe if it's used correctly.

"We're not totally clear why they opened an investigation because they actually had all the information before they opened a formal investigation", he said. However, this increased loss per share is expected to not affect the revenues this quarter.

Tesla has had an intense past few months as it moves toward a $2.6 billion acquisition of solar-panel installer SolarCity Corp.

Once the companies are combined Mr Musk's ownership stake will increase from 23% to 25%, leaving him as the largest shareholder. Analysts expected Tesla to lose 52 cents per share on $1.62 billion in sales, according to Yahoo Finance.

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