Tesla losses mount, even as CEO plans ambitious growth

PALO ALTO – Tesla reported stronger-than-expected results Wednesday, citing greater profit margins on its vehicles, but continued to lose money.

Tesla reported a $401 million loss in the second quarter, roughly 37 percent larger than the same period last year, or $2.04 per share. Company revenues for the quarter were $2.8 billion, more than double last year’s second quarter revenues. Adjusted for one-time expenses, Tesla reported a $336 million loss, or $1.33 per share.

The company fared better than analyst predictions.

Market watchers surveyed by Bloomberg estimated a company loss of $450 million, or $2.34 per share, on revenue of $2.5 billion. Excluding certain expenses, analysts estimated losses of about $310 million, or $1.88 per share.

The electric vehicle maker and clean energy company is building its brand beyond a luxury niche, quadrupling production and introducing new products like its lower-cost Model 3, an electric pickup known as the Model Y, solar roofs and residential and commercial storage.

Tesla said it received a boost from the first deliveries of its lower-cost Model 3.

The company delivered Model 3 sedans to 30 employees last week. The company hit a tight production deadline, turning out its first, lower-cost cars in July. The company hopes to produce a half-million vehicles at its Fremont plant next year, a goal CEO Elon Musk acknowledged would bring “production hell.”

Deliveries for the luxury Model S and X stalled in the second quarter, declining 12 percent from the previous three months. The company blamed a shortage of 100 kilowatt hour battery packs. It shipped about 47,100 vehicles in the first half of 2017, still on pace for a record year.

Clement Thibault, senior analyst at Investing.com, noted that the electric vehicle and clean energy company needed outside cash infusions for three of the last four quarters. The company also must wrestle to master increased customer service demands, including customer support and charging and repair network, he said.

“This of course raises questions about Tesla’s broader ability to scale not just its manufacturing operation, but the entire supporting infrastructure, particularly since Tesla continues to insist it will run all its operations in-house,” Thibault said.

The company added two independent directors to its board, Linda Johnson Rice and James Murdoch, in July, easing investor concerns that the board was dominated by company insiders.

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