Electric car maker Tesla Inc. saved $ 739.5 million in cash last quarter, paving the way for a company record net loss of $ 717.5 million as more electric cars came out.
However, CEO Elon Musk repeated his pledge to make a net profit in the third and fourth quarters and apologized to a two analyst conference call he had hired in the first quarter. Telsa's shares rose 11 percent to $ 334.18 after the close.
The net loss more than doubled year-on-year and was slightly higher than in the first quarter. But Tesla's second quarter cash burning slowed.
Californian company Palo Alto announced that it lost $ 4.22 per share from April to June as sales rose 43 percent to just over $ 4 billion. Adjusted for share-based payments, the company lost $ 3.06 per share. That was worse than Wall Street estimates. FactSet analysts expected a loss of $ 2.88 per share.
In a statement released after Wednesday's close, Tesla expects 50,000 to 55,000 Model 3 models to be produced in the third quarter. This corresponds to an increase of at least 75 percent compared to the first quarter.
Tesla spent millions to produce 5,000 Model 3 sedans a week by the end of June. Production is now said to be increasing, with the goal of producing 6,000 a week by the end of August. The company expects to reach 10,000 3 a week "sometime next year".
Cash from the sale of the Model 3, which starts at $ 35,000 but is significantly higher in options, is key to getting more credit and making profits.
The company expects rapid growth and should continue to generate quarterly profits unless an unforeseen event or economic downturn occurs.
"We expect positive cash flow, including operational cash flows and investments," the statement said.
The company announced that it had cut investment costs by changing its strategy to produce Model 3 on existing assembly lines, one in a giant tent, rather than adding new assembly lines. For 2018, Tesla forecast total investments of just under $ 2.5 billion. That is significantly less than the 2017 level of $ 3.4 billion.
During the second quarter, Tesla fired 9 percent of its workforce to deliver Musk's promise to make money. The company has never made an annual profit and has only had two profitable quarters since going public in 2010. Tesla has also asked for replacement parts suppliers.
Last quarter, Musk fired analysts who asked questions about Model 3 reservations and other financial matters during the quarterly conference call.
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