Despite reporting record breaking losses for the second quarter of the current year at $717.5 million, there was a surprise increase in the share price of electric car maker Tesla. Many see this as a result of an apologetic and restrained performance by the company’s chief executive, Elon Musk, during an analyst call.
There was a rise of about 9 per cent in the shares of Tesla despite the company reporting $3.06-per-share loss against a revenue of $4 billion. The company forecast more increase in its production capacity and profitability for the second half of the year.
“We believe we can be sustainably profitable from Q3 onwards,” Musk said on the call, as he boasted of “viral growth” of sales and a “mind-blowing leap forward” in vehicle production.
In the quarter, the company churned out 53,339 vehicles and delivered 40,768.
The recent period has been a turbulent one for Tesla with the company achieving a strategic production mile stone of churning out 5,000 Model 3 cars in a single week. But the company was in bad light throughout the three months of the quarter primarily because of uncontrolled and sudden outbreaks of Musk.
Among the first such incident was during an analyst call in May where Musk alleged that the Wall Street analysts posed “boring bonehead questions” and ignored institutional investors over a YouTuber.
At the most recent analysts call, a very discernable subdued Musk said that he was tired because he had been “working like crazy in the body shop lately” and he even tendered apologies to the two analysts whom he had insulted earlier. Musk answered analysts’ questions for over one hour.
“I’d like to apologize for being impolite on the prior call,” he said. “There’s no excuse for bad manners.”
It is critical for Tesla’s future that it is bale to mass produce its Model 3 which is the cheapest car from the Tesla stable and there have been multiple occasions when the company has failed to achieve self-imposed targets of production for the all-important 5,000-cars-per-week metric. The company has also been unable to bring down the dependence on automation in its factory and develop an entire assembly line in a tent.
Tesla has claimed that its confidence of achieving production target of 6000 Model 2 cars in a week by the end of August and 10,000 Model 3s per week “sometime next year”., said the company in a letter to shareholders.
While comparing the manufacturing process to a “giant cybernetic collective”, Musk pledged gaining of efficiencies.
At the end of the current quarter, Tesla had $2.2 billion in cash and cash equivalents in hand and Musk was very optimistic about the capacity of the company to make incremental increases in the production output without the need for raising equity.
“It took 15 years to execute on our initial goal to produce an affordable, long-range electric vehicle that can also be highly profitable,” Musk and the chief financial officer, Deepak Ahuja, wrote in the shareholder letter. “In the second half of 2018, we expect, for the first time in our history, to become both sustainably profitable and cash flow positive.”
(Source:www.theguardian.com)
There was a rise of about 9 per cent in the shares of Tesla despite the company reporting $3.06-per-share loss against a revenue of $4 billion. The company forecast more increase in its production capacity and profitability for the second half of the year.
“We believe we can be sustainably profitable from Q3 onwards,” Musk said on the call, as he boasted of “viral growth” of sales and a “mind-blowing leap forward” in vehicle production.
In the quarter, the company churned out 53,339 vehicles and delivered 40,768.
The recent period has been a turbulent one for Tesla with the company achieving a strategic production mile stone of churning out 5,000 Model 3 cars in a single week. But the company was in bad light throughout the three months of the quarter primarily because of uncontrolled and sudden outbreaks of Musk.
Among the first such incident was during an analyst call in May where Musk alleged that the Wall Street analysts posed “boring bonehead questions” and ignored institutional investors over a YouTuber.
At the most recent analysts call, a very discernable subdued Musk said that he was tired because he had been “working like crazy in the body shop lately” and he even tendered apologies to the two analysts whom he had insulted earlier. Musk answered analysts’ questions for over one hour.
“I’d like to apologize for being impolite on the prior call,” he said. “There’s no excuse for bad manners.”
It is critical for Tesla’s future that it is bale to mass produce its Model 3 which is the cheapest car from the Tesla stable and there have been multiple occasions when the company has failed to achieve self-imposed targets of production for the all-important 5,000-cars-per-week metric. The company has also been unable to bring down the dependence on automation in its factory and develop an entire assembly line in a tent.
Tesla has claimed that its confidence of achieving production target of 6000 Model 2 cars in a week by the end of August and 10,000 Model 3s per week “sometime next year”., said the company in a letter to shareholders.
While comparing the manufacturing process to a “giant cybernetic collective”, Musk pledged gaining of efficiencies.
At the end of the current quarter, Tesla had $2.2 billion in cash and cash equivalents in hand and Musk was very optimistic about the capacity of the company to make incremental increases in the production output without the need for raising equity.
“It took 15 years to execute on our initial goal to produce an affordable, long-range electric vehicle that can also be highly profitable,” Musk and the chief financial officer, Deepak Ahuja, wrote in the shareholder letter. “In the second half of 2018, we expect, for the first time in our history, to become both sustainably profitable and cash flow positive.”
(Source:www.theguardian.com)