Tesla reports wider loss than expected but profit is on the way as Model 3 ramps up
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Tesla reported a wider second-quarter loss than analysts had expected overnight, but says it will be profitable later this year as it ramps up production of its Model 3 sedan.
The company reported an adjusted loss per share of $US3.06 (-$US2.90 expected), while revenue topped estimates at $US4 billion ($US3.97 billion forecast).
The results were highly anticipated, following an eventful quarter for the electric car and solar-panel maker.
The company is closely watched by investors who hold battery metal stocks producing materials such as lithium and cobalt.
Tesla recently pushed back the delivery timelines for new orders of two of three versions of its Model 3 sedan.
Investors and analysts have been interested in any updates on the pace of production of the mass-market cars, and whether Tesla may need to raise additional capital even after CEO Elon Musk said otherwise.
Tesla said it hit a weekly production rate of 5000 Model 3s “multiple times” in July, and aims to increase that to 10,000 “as fast as we can.”
The electric car maker said it expects to produce 50,000 to 55,000 Model 3s in the third quarter.
Tesla reported a negative free cash flow of $US739 million, smaller than analysts had forecast, and less than the $US1.05 billion burn in Q1.
“Going forward, we believe Tesla can achieve sustained quarterly profits, absent a severe force majeure or economic downturn, while continuing to grow at a rapid pace,” the company said.
Tesla’s stock fell 3% immediately after the release before rebounding to gain as much as 3.6%. It fell 3% this year through the market close on Wednesday.