Fri, May 04, 2018 - Page 10 News List

Tesla posts narrower net losses

AFP, SAN FRANCISCO

Tesla Inc on Wednesday reported that it lost less money than the market expected and said it was making progress ramping up production of Model 3 electric cars.

Tesla shares rose briefly, then dove about 5 percent to US$286.15 after an earnings call during which CEO Elon Musk dismissed as “boring” some questions about money.

The automaker reported net losses of US$784.6 million on revenue of US$3.4 billion in the first three months of this year.

The adjusted loss per share was US$3.35, against expectations of US$3.42 on revenue of US$3.32 billion.

The California-based firm said it made “significant progress” in ramping up production of Model 3 vehicles considered key to its success in the mass market.

Prior to a planned shutdown of production to make the system more efficient, Tesla managed to reach 2,270 vehicles a week. That rate is still shy of a goal that Musk had set.

“We continue to target Model 3 production of approximately 5,000 per week in about two months, although our prior experience has demonstrated the difficulty of accurately forecasting specific production rates,” Musk said in an earnings letter to shareholders.

To achieve those Model 3 production numbers, Tesla will shut down its line again this quarter to make modifications, Musk said.

It expects to shut down production for about 10 days to clear out “bottlenecks” across the lines.

If improvements go according to plan, Tesla could begin showing profit in the second half of this year, he said.

“It is high time we became profitable,” Musk said during an earnings call.

“The truth is, you are not a real company until you are. That is our focus right now,” he said.

The firm vowed to cut back projected expenses to just “critical needs” to get the Model 3 production line up to speed and turn a profit.

“We have good visibility of our path to fully ramp and stabilize Model 3 production this year,” Musk said. “The path to an electrified revolution is not easy, but what we’re trying to achieve is worth fighting for.”

Tesla’s northern California plant is “packed to the gills” and that later this year Tesla would decide where to build a second facility at which a new Model Y would be built, he said.

Tesla will also announce a China location for a new “Gigafactory” that will produce batteries and vehicles, he said.

“In the future, all Gigafactories will include vehicle production,” he said.

Musk passionately defended the potential for self-driving cars to dramatically reduce accident fatalities and railed at the media for “inflammatory” headlines that could turn public opinion and regulators against the technology.

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