Tesla posts record $717 million net loss in second quarter

Model 3					Tesla Model 3 Performance 0-60 mph put to the test in latest acceleration run

Model 3 Tesla Model 3 Performance 0-60 mph put to the test in latest acceleration run

Elon Musks electric auto company Tesla burned through $739.5 million in cash in its second quarter, resulting in a record $717.5 million net loss.

There were less quantifiable factors as well, in the form of apologies from Tesla CEO Elon Musk for his behavior three months earlier. Shares of Tesla have risen 11% to $$332.99 in after-hours trading.

Tesla said Wednesday that its lone car-making factory in Fremont, Calif., had made 5,000 Model 3 sedans a week multiple times during July and should be able to continue at that rate through the third quarter. The company also manufactured an additional 2,000 Model S and Model X vehicles per week.

Maybe Musk is exhausted after the huge effort Tesla has taken to ramp up its auto production - like adding a massive tent factory outside its vehicle plant in Fremont, California. We believe its because the company has scaled down its level of ambitions for expensive and exotic automation production-aids. Cash from Model 3 sales is key to holding off more borrowing.

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For nearly a year, Tesla followers fixated on the company's target to make 5,000 Model 3s in a week. "Perhaps it reflects a more cautious Elon Musk". Tesla went through $739.6 million in cash between April and June, less than the $900 million Wall Street analysts had forecast. Tesla says it built 53,339 cars in the second quarter, of which 18,449 were Model 3s.

But on Wednesday, a contrite Musk apologized to both and said he was exhausted from working more than 110 hours per week last quarter. But the company burned through only about $430 million of its cash on hand, leaving it with $2.8 billion in its reserves. His first question came from Bernstein's A.M. (Toni) Sacconaghi, an analyst he butted heads with during the first-quarter conference call. Tesla reported a record net loss of $718 million, which was larger than what analysts had been forecasting. Tesla said its capital expenses would be slightly below $2.5 billion in 2018, less than last year's $3.4 billion.

Tesla also said it's working on a new version of its Autopilot semi-autonomous software that will have greater safety features. "In the second half of 2018, we expect, for the first time in our history, to become both sustainably profitable and cash flow positive". The company has never turned an annual profit and has had only two profitable quarters since becoming public in 2010. Automotive gross margin increased to 20.6% GAAP up from 19.7% in the previous quarter which means Tesla makes more money from every vehicle it sells than it did before.

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