The electric car giant Tesla had the shares plunged over 10 percent after -Timer Trading after recording a $ 408 million loss in Q2 2019 – despite a record number of cars, CNBC reported Wednesday.
The company produced around 87,000 cars in the quarter and sent around 95,200 of them throughout the quarter per edge, generating approximately $ 6.3 billion in revenue. $ 408 million is an improvement over the loss of $ 702 million the previous quarter, and around $ 117 million of the losses were calculated as "restructuring costs related to the layoff and closure of stores," the website wrote. Tesla also said it closed the quarter with $ 5 billion in cash, more than at any time in history, and as the New York Times noted, the 95,200 sent cars are up 50 percent from the previous quarter.
However, the Times wrote that the view was still below the analyst's expectations, which resulted in the equity fall:
Second quarter losses amounted to $ 2.31 per share. Revenue jumped to $ 6.3 billion, from $ 4.5 billion in the first three months of the year.
Both figures came under Wall Street's expectations. Analysts had expected a $ 1.27 loss per share and $ 6.5 billion revenue, according to FactSet. Tesla shares fell around 10 percent in extended trading. Before the income report, the stock had closed at $ 264.88, up 1.8 percent.
As the Times noted, Tesla is using big on a Model 3 facility in China and partly drove record deliveries by squeezing prices (including a $ 1000 reduction of the cheapest Model 3 price to $ 38,990 last week). It is "unclear how much money, if any" Tesla earns on the cheaper versions of Model 3, and the whole line accounts for about 80 percent of the deliveries, the paper wrote. Another problem is that sales of their more expensive cars, the premium Model S and the SUV Model X, are declining when customers pick up Model 3.
"It is obvious that the desire for Model S and X is not so strong," Cross said. -Sell Reports CEO Shane Marcum to Times. "Model 3 can be used for the sale of S and X."
Per Wall Street Journal, record numbers of shipments left Tesla with revenues "more than 10% below the previous record, set in the fourth quarter last year."
Tesla recently upgraded Model S and X to have a 10 percent higher reach, faster charging at Supercharger stations, and a new air suspension system, but CEO Elon Musk has dismissed the rumors that Tesla is planning to introduce brand new models of the cars.
"There may be a false expectation in the market that, for example, come a few major overhauls for S and X, which then, you know, can make people hesitate to buy if they think it is like some radical redesign comes, and that is why I publicly stressed that this is not the case, "Musk told the reporters during a revenue interview on Wednesday, according to Verge. "Model S and X today are radically better than those when we first started production, especially S. Like, a 2013 or 2012 Model S, compared to today's Model S – it's night and day."
Musk added that he hoped improvements to Tesla's "full self-propelled" Autopilot function, which can be injected into the company's vehicles via a simple update and cost several thousand dollars, will convince more customers to raise more money, wrote Verge .
However, despite improvements, just over 158,000 cars sent to Tesla are still less than halfway to the 360,000 to 400,000 shipments target in 2019, according to the Times, and the continued phasing out of a federal electric vehicle tax credit (down from $ 3,750 to $ 1,875 as of July 1, and disappear at the end of the year) can damage demand. The upcoming Model Y SUV will not come on stream until the end of next year, and the pickup / semi-truck will first follow it. As Ars Technica noted, hitting the launch date of the Model Y will require increased capital expenditures at a time when Tesla has attempted to cut them; Tesla calculated that they would spend $ 1.5 to $ 2 billion in capital expenditures in 2019, a reduction from previous predictions.
It leaves Musk to an uphill battle to achieve Musk's goal of breaking even in Q3 2019 and achieving profitability by the end of the quarter, as the Times reported he said during the revenue call.
Tesla's long-standing technical manager, JB Straubel, withdraws from that role, but will still be a "senior advisor" in the company, Verge reported separately. Straubel said during the conversation that he "did not disappear" and that his decision was not the result of "someone you know, lack of trust in the company, team or something like that."