Tesla reports $710m losses in first quarter
Image credit: Dreamtime
Upmarket electric car manufacturer Tesla Motors has released its Q1 report, which details continued losses as the company struggles to mass manufacture its Model 3 car.
The Model 3 – which retails for $35,000 (£25,750) but can be customised at additional cost – has attracted considerable interest. The basic model comes with a 50hWh battery with a range of 320km, although it can be upgraded to a 75kWh battery with a range of 500km.
Hundreds of thousands of people have put down refundable $1000 (£735) deposits to reserve a Model 3. While Tesla expected to be building 20,000 of the cars per month by the end of 2017, it was able to build fewer than 2500 in the final quarter of 2017. The company recorded nearly $10bn (£7.4bn) in long-term debt at the end of the year.
This year, the company has continued to struggle to produce models as quickly as expected, with customers expecting to wait for extended periods for their reserved cars.
Tesla CEO Elon Musk has since directed his California-based factory to run 24 hours a day in order to reach its ambitious production goals, although it was forced to shut down for the best part of a week in April. Recently, Musk admitted that Tesla had made an error in relying too heavily on automation at its factory.
“We went too far in the automation front and automated some pretty silly things,” he commented.
Throughout the first quarter of 2018, Tesla has exceeded some expectations, generating higher revenue, but making a loss of $710m (£522) with $745m (£548m) of spending. According to Musk, reservations have remained stable, and production could reach its 20,000 cars-per-month target by the end of June.
Although Tesla’s share prices remained reasonably stable following the report, they took a dive of five per cent following a conference call with analysts and investors in which Musk was reported to have behaved erratically and refused to answer some questions.
During the call, Musk described himself as “quite confident” that Tesla would push into profit during the third quarter as the company undergoes a restructuring. Despite this reassurance, Musk was said to have deflected and interrupted questions about how many reservations holders have configured options for their cars – affecting future profits – and about future capital requirements, referring to these questions as “boring,” “bonehead,” “not cool” and “so dry they’re killing me,” and instead taking approximately a dozen questions from a supportive YouTube channel host.