Tesla shares rise despite biggest quarterly loss yet

Tesla shares rise despite biggest quarterly loss yet

Musk in a conference call on Wednesday, addressing the company's largest quarterly loss to date, said the electric vehicle maker would not need to raise more cash and that capital expenses would be slightly below $2.5 billion in 2018, lower than most analysts' estimates. "It's not right", he told an analyst from RBC Capital Markets.

VideoTesla soared in late trading after second-quarter revenue beat expectations and the cash burn slowed. This quarter, Tesla hit its 5,000-car-per-week production goal "multiple times" in July-meaning it's not hitting this rate consistently. In Q2, Tesla delivered a total of 40,768 cars, out of which the Model 3 accounted for 18,449 deliveries.

With new heights in weekly production being targeted, Tesla expects to produce between 50,000 and 55,000 Model 3 vehicles in the third quarter. Adjusted for stock-based compensation, the company lost $US3.06 per share. The company is also planning a new factory in China that will require significant funding, which the company says it will raise through local debt.

Cash from selling the Model 3, which starts at $US35,000 but runs far higher with options, is key to holding off more borrowing and turning a profit.

The company said it has cut back on capital spending by changing its strategy to produce the Model 3 on existing assembly lines, one in a giant tent, rather than adding all-new lines. Many analysts have questioned how long he can stay insistent, citing lingering doubts that the company can sustain higher Model 3 production levels and afford to pay off some of the liabilities looming on its balance sheet.

Tesla burned through about $740 million during the three months ended in June, a better showing than the roughly $900 million analysts were expecting.

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

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

The Model 3 was initially a bone of contention for Tesla as the company was struggling to turn a profit and was losing money on every Model 3 unit it shipped. Musk was also enthusiastic about the premise of Tesla owners receiving prizes for completing the Atari titles.

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