Tesla Inc lost US$408 million in its latest quarter as it struggles to prove it can make money selling electric vehicles at mass-market prices.
The setback announced on Wednesday had already been telegraphed by Tesla CEO Elon Musk.
Still, it underscored Tesla’s ongoing challenges and helped explain why the company’s shares have plunged more than 20 percent this year, while the Standard & Poor’s 500 index has surged by 20 percent.
On the upside, Tesla’s second-quarter revenue climbed 47 percent from the same time last year to US$5.2 billion.
It also generated US$614 million in cash, helping fatten its bank account to US$5 billion through last month. That is money Tesla is going to need to repay its massive debt and other bills.
The company has now posted successive quarterly losses totaling US$1.1 billion in the first half of this year and sustained losses of more than US$6 billion since its inception.
Losses of US$2.31 per share for the quarter were worse than the US$1.27 per share losses that analysts had expected, according to FactSet.
It also came despite Tesla selling more electric vehicles — 95,356 — than in any other quarter in its history.
The company remains behind the sales pace needed to realize Musk’s goal of delivering 360,000 to 400,000 vehicles this year.
In a shareholder letter released with its second-quarter result, Tesla said it would focus more on increasing its manufacturing capacity and its deliveries of vehicles, instead of hitting a specific financial target.
Musk then told investors during a conference call that Tesla should be “around break even” in its current quarter ending in September and expects to turn a profit during the final three months of the year.
“I feel pretty confident about that,” Musk said.
Tesla is pinning its hopes largely on its lowest-priced vehicle so far, the Model 3 sedan, which starts at US$35,000.
That is comparable to other mass-market vehicles, but many analysts doubt that the company could make money on the Model 3 at its starting price.
Tesla other’s cars, the Model S and Model X, sell for more than US$70,000 — far beyond the reach of most consumers.
“We have to make cars more affordable,” Musk said during the conference call.
Musk said he also believes Tesla could make profits by launching a ride-hailing service composed entirely of driverless vehicles by the end of the next year.
His plan would offer Tesla owners with vehicles equipped with a special self-driving chip to allow their vehicles to operate in a fully robotic mode so they can pick up fare-paying passengers.
Besides releasing its financial results, Tesla said that its longtime chief technology officer, Jeffrey Straubel, is stepping down to become an adviser.
Straubel is to be replaced by one of his subordinates, Drew Baglino.
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