Despite record-breaking deliveries in the second quarter the EV maker reported yet another loss for March to June this year.
Aarian Marshall had the news for Wired:
On one hand, Tesla is making and selling cars. Wednesday, the company said it had delivered 95,356 vehicles in the second quarter of 2019, beating its own record of 90,966, from the end of 2018. That’s a year-over-year increase of 134 percent. The figure also beat Wall Street’s prognostications and seemed to signal that the electric-car maker was ready to climb out of an early 2019 slump and get back to saving the world via four wheels.
On the other hand, Tesla isn’t back to making a profit yet. The company also reported it lost $408 million in the second quarter. That’s an improvement over the prior quarter, when it reported a $702 million loss; but the loss was still larger than Wall Street analysts’ expectations, which were already pretty grim. The company’s stock price fell more than 10 percent in aftermarket trading. Tesla also said longtime CTO and cofounder JB Straubel would step down to become a senior adviser to the company. Company vice president of technology Drew Baglino will take over some of Straubel’s responsibilities.
Reuters’ Alexandria Sage and Vibhuti Sharma noted the loss had been bigger than expected:
A quarterly loss was deeper than expected, and despite record deliveries in the quarter, revenue came in lighter than analysts’ expectations. Moreover, margins – a focus of investors – narrowed in the quarter, adding to Tesla’s challenges in delivering profit going forward.
Shares fell 11.5% after hours and extended losses after the announcement about Straubel, a founding engineer who will become a senior adviser.
Under pressure to meet his repeated promises to make Tesla sustainably profitable, Chief Executive Elon Musk is trying to contain costs while still spending on major initiatives from a Shanghai factory and assembly-line to upcoming models such as the Model Y SUV and a Semi commercial truck.
USA Today’s Nathan Bomey and Chris Woodyard focused on sales:
One analyst questioned why Tesla lowered the price of the Model 3 if demand is so strong. Musk said the price as cut by $1,000 to partially offset the loss of an electric-vehicle tax credit. Plus, he said, “Making cars more affordable is part of the Tesla mission.”
Tesla makes two luxury vehicles, which carry big price tags and, likely, bigger profit margins. But Musk downplayed their importance in the long run, saying that the future of the company depends on the success of the Model 3 sedan and Y SUV.
Sales of the luxury Model S sedan and Model X SUV have slowed as the vehicle body styles age and customers gravitate toward the cheaper Model 3. Production of the Model S and X totaled 14,517 in the second quarter, down about 41%.from a year ago.
