Tesla, the electric car manufacturer, reported a loss of $408 million as the company continues to have issues selling their cars at normal market prices.
This loss was already somewhat expected thanks to CEO Elon Musk who hinted at the loss. Even with the alert, the company's stock fell which means Tesla has seen their price fall over 20% while the rest of the overall market has increased 20%.
There is good news for Tesla who saw their second quarter revenue increase by 47%, to around $5.2 billion, when compared to the previous year. The company also raised $614 million in cash for a total of $5 billion as of June. All of this cash will go towards the company's debt and other costs.
Overall investors seem cautious about Tesla's future which sent their stock down 10% after the loss announcement.
Since it was founded, Tesla has loss over $6 billion, but Musk continues to promise that the company will become profitable. Tesla did manage to post a $451 million profit during the last half of last year, but with two quarters with losses of $1.1 billion things clearly aren't improving.
Even the stock drop of $2.31 per share was worse than expected. News also broke that Tesla sold more cares in that quarter than in any other, but their record was still behind Musk's vision of selling 400,000 cars by the end of the year.
Tesla reported to their shareholders that the company will focus on increasing the manufacturing and delivery of their vehicles instead of focusing on a specific financial goal.
Musk also stated to investors that Tesla should be able to “around break even” by the end of this current quarter and believes they will make a profit in this year's final quarter.
Tesla is hoping that their new Model 3 sedan, their lowest cost car to date at $35,000, will help things along. With a vehicle to compete with most other mass market cars, analysts still are worried about the company's ability to make a profit. Tesla's other two models, the Model X and Model S, both costs around $70,000 or more which is beyond the typical costs of a mass market car.
“We have to make cars more affordable,” Musk conceded during the conference call.
Musk also stated that he believes the company can find profits by started up their own ride-hailing platform with autonomous vehicles by the end of 2020. He aims to turn current Tesla owner vehicles, who have the autonomous chip set installed, into fully self-driving cars to begin operating as a ride-hailing service.
Musk hopes that the around one million Teslas will be turned into autonomous taxis, even though most experts on the subject don't believe this would be possible by the end of 2020. General Motors already halted their efforts to launch an autonomous ride-hailing service this year, indicating that self-driving platforms won't come as soon as originally hoped.
Tesla also announced that Chief Technology Officer, Jeffrey Straubel, will be leaving his position to become a company advisor.
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