Tesla has sustained losses of more than $
billion since its inception, but Musk promised
a year ago that the road ahead would be
paved with nothing but profits. The Palo Alto,
California, company made good on that pledge
with a profit of $451 million during the final
half of last year, but now has posted successive
quarterly losses totaling $1.1 billion during the
first half of this year.
The loss of $2.31 per share for the April-June
quarter was worse than the $1.27 per share loss
on a GAAP basis that analysts had expected,
according to FactSet. It also came despite Tesla
selling more electric cars — 95,356 — than in any
other quarter in its history. The company remains
behind the sales pace needed to realize Musk’s
goal to deliver 360,000 to 400,000 cars this year.
In a shareholder letter released with its second-
quarter result, Tesla said it will focus more on
increasing its manufacturing capacity and its
car-delivery cars instead of hitting a specific
financial target. The company said it will “aim” for
a profit in the current quarter, without making
an iron-clad commitment to do so.
Just reaching the lower-end of Musk’s car-
delivery goal for this year may prove difficult
because the U.S. has reduced its tax incentive
for electric car purchases before phasing it out
entirely at the end of the year.
Tesla is pinning its hopes largely on its lowest-
priced vehicle so far, the Model 3 sedan, which
starts at $35,000. That’s comparable to other
mass-market cars, but many analysts doubt the
company can make money on the Model 3 at its
starting price. Tesla other’s cars, the Model S and
Model X, both sell for more than $70,000 — far
beyond the reach of most consumers.
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