Tesla loses money for 13th consecutive quarter

Henrietta Brewer
August 10, 2016

Tesla Motors Inc on Friday disclosed $1.1 billion in third quarter cash requirements in payments and planned expenditures, about a third of the cash on hand mid-year, in a new sign of pressure on the electric vehicle maker.

Musk said the new vehicles, dubbed "Tesla Minibus" and "Tesla Semi", will be revealed within the next six to nine months, before going into mass production "within low single digit years". Complicated parts, like the SUV's gull-wing doors and free-standing second-row seats, were also issues.

Tesla reported a net loss of US$293.2 million, or US$2.09 per share, in the quarter ended on June 30, up from a US$184.2 million loss in the same period a year earlier. The company blamed "steep production ramp, which resulted in nearly half of Q2 production occurring in the final four weeks of the quarter" for lower-than-expected deliveries (read: It's All About Production: Tesla ETFs to Ride on Q1 Results).

Tesla has only launched two vehicles to date: the Model S and the Model X, and has plans to begin deliveries of the Tesla Model 3, a four-door luxury sedan, by the end of 2017.

Tesla said it is on track to build 50,000 vehicles in the second half of the year, after delivering just under 30,000 in the first half.

It is the second consecutive quarter that Tesla has missed production targets, raising doubts about whether it will reach its full year goal. But Tesla expects to spend an additional $2.25 billion this year to support its accelerated production schedule. Analysts polled by Thomson Reuters estimated a loss of 52 cents per share, or 94 cents including expenses.

Tesla also said that the locations of its new mall-based locations are improving because "many shopping malls now consider us the new standard for an anchor tenant based on the amount of foot traffic that we draw and our very high revenue per square foot". It also anticipates production volume in the fourth quarter to increase further to 2,400 vehicles per week.

Tesla wouldn't give an updated number of reservations on Wednesday. Near-term losses mounted as Tesla made significant inroads on plans for growing vehicle sales from 50,000 deliveries during 2015 to its target of 2018 deliveries during 2018. Earlier this week the companies agreed to a $2.6 billion merger. This non-GAAP loss per share was wider than its $0.57 loss in the prior quarter and its $0.48 loss in the year-ago quarter. Mr. Musk said that customers to love the "next-generation technology" and he expects "exponential growth" from 4QFY16.

The company recently secured the acquisition of SolarCity, the largest residential solar energy installer and generator in the United States, to accelerate the world's transition to sustainable energy.

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