Tesla's biggest net loss helps meet production target

2019 Jaguar I Pace S

2019 Jaguar I Pace SEnlarge

Electric auto maker Tesla burned through $US739.5 million ($1 billion) in cash last quarter, paving the way to a company record $US717.5 million net loss as it cranked out more electric cars.

Tesla said it would produce its new Model 3 sedan at a profit after several recent weeks in which output stabilized, buoying hopes that the electric vehicle maker led by Elon Musk will stanch its financial losses in the second half of the year.

Tesla went through $739.5m (£565.2m) in cash last quarter to reach its production objectives.

Telsa's shares jumped 9.3 per cent to $US328.85 in after-hours trading. The company probably will use "essentially a loan from the local banks" in China to fund a new factory it's building in Shanghai, he said on the call. He and chief financial officer Deepak Ahuja wrote that they expected Tesla to build as many as 55,000 Model 3s this quarter, which would almost double output from the three months that ended in June.

Tesla said production was rising and a goal of 6,000 cars per week by the end of August had been set. Tesla says it's on track to produce 100,000 Model S and X cars this year.

The outspoken Musk, who told analysts last quarter that he refused to answer their "boring" questions, apologized multiple times on Wednesday during a post-earnings call for his past behavior.

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Last quarter, Mr Musk mistreated two analysts by calling their queries about the company's cash needs and Model 3 orders "so dry" and "not cool". The call triggered a stock sell-off and raised questions about Musk's behaviour.

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

Mr Musk said he expects the company to achieve sustained quarterly net profits from now on, barring an unforeseen event, supplier problems or economic downturn.

Tesla ended June with about $2.2 billion in cash, the least it's carried since the first quarter of 2016.

Tesla pulled out all the stops to finally hit that goal 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.

Tesla has begun to lay off 9 percent of its workforce as it tightens spending.

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