Published: Thu, August 02, 2018
Money | By Michele Stevens

Tesla burns $739.5 million in cash on way to record 2Q loss

Tesla burns $739.5 million in cash on way to record 2Q loss

If the company can hold to its lofty promises of ramping up Model 3 production, and if it does indeed turn a profit and improve margins, Tesla's balance sheet might soon resemble that of a real automaker.

Bannon said that when he joined Tesla, employees considered many options, including Nvidia graphics cards, and said they talked with people at Arm, whose technology is used in chips from Qualcomm (QCOM) and other companies. Margins went from nearly flat to 15 percent, still a ways off the 25 percent mark that CEO Elon Musk has called for.

Musk had dressed down Toni Sacconaghi, an analyst for the Sanford C. Bernstein investment management firm, during the previous quarter's conference call for asking what the billionaire techie called "boring, bonehead questions".

"There's no excuse for bad manners", he said in his apology, before adding there was a reason: "I got no sleep and had been working 120-hour weeks".

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Elon Musk, 47, the billionaire technology entrepreneur who founded Tesla, believes the Model 3 will spark an electric vehicle revolution. Musk also took time durin.

The company said it expects to reach 10,000 Model 3s per week "sometime next year".

Tesla pulled out all the stops to finally achieve this at the end of June, flying in a production line from Germany on a cargo plane, adopting an around-the-clock schedule and erecting a massive tent to house another assembly line in the parking lot of its California plant. "We like the more muted tone of the company's outlook, with the absence of unnecessary new stretch goals", he explains. The company has never turned an annual profit and has had only two profitable quarters since becoming public in 2010.

The Fremont factory is expected to build approximately 50,000-55,000 Model 3s in Q3. Tesla still hasn't made any $35,000 base model cars available.

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Thus far, Tesla has only produced higher-cost versions of the Model 3, starting at about $49,000. That's substantially less than the 2017 level of $US3.4 billion.

In its second-quarter earnings today, Tesla announced losses of $3.06 on $4 billion in revenue. The compay reported an adjusted net loss of $3.06 per share, more than analysts expected. Tesla went through $739.6 million in cash between April and June, less than the $900 million Wall Street analysts had forecast.

Excluding items, Tesla reported a loss of $2.45 per share, compared with expectations of a loss of $2.92.

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