Tesla plunges back into the red
Company's brief period of profitability ends with a larger-than-expected loss blamed, partially, on 'unforeseen challenges' related to exporting the Model 3.
After two profitable quarters, its first in many a moon, Tesla posted a US$702 million ($984 million) loss during the first quarter of 2019.
Although red ink was expected, the loss was significantly larger than many analysts and the market had predicted, and ranks as the company's fourth largest quarterly loss so far.
Despite making 63,000 Model 3 sedans in the first quarter, up slightly on the final quarter of 2018, sales in the US dropped to 22,425 – down significantly from the 61,650 sold in the final three months of last year.
Tesla says this is partially down to the expiry of its full US$7500 ($10,500) federal tax credit at the end of 2018, which served to pull a lot of sales forward.
The company says many of the Model 3 sedans made in the first quarter are destined for China and Europe, and are currently stuck in transit.
In a call with investors, Elon Musk, the company's CEO, described the first shipment of Model 3s overseas as “the most difficult logistics problem I’ve ever seen".
In response to question to sales in the US, Musk said demand remained "quite solid, quite strong".
Sales of the Model S and Model X halved to just 12,100. The company said this was due to the deletion of the 75kWh model, and many sales being brought forward to the end of last year.
Looking forward, the automaker says it will likely lose money in the second and, possibly, third quarters too. In better news, though, Tesla believes it will make "360,000 to 400,000 vehicle deliveries in 2019", up 45 to 65 per cent over 2018.
With many more months of toil ahead, some analysts are worried about the company's shrinking cash pile, which fell from US$3.7 billion ($5.2 billion) to US$2.2 billion ($3.1 billion), largely due to the company paying off a due debt.
The large loss rounds out another turbulent quarter for Tesla, which included the unveiling of the Model Y crossover, announcing the arrival of the US$35,000 entry-level Model 3, closing most of its stores and moving to an online sales model, deciding not to close a lot of those stores, and reconfiguring and making it difficult to buy said entry-level Model 3.
The company has also proclaimed it will have self-driving cars operating by 2020, and is still trying to work out a settlement with the Securities and Exchange Commission (SEC) over potentially misleading and market-moving tweets by Musk.
2025 Porsche Macan electric: Stuttgart’s biggest gamble yet
