With a record loss of $709.6 million in the first quarter and a $2 billion loss in market value in just one day, Tesla is burning money like there’s no tomorrow.
Tesla quarterly loss was the highest in the company’s history. Last year, during the same quarter, the loss stood at $330.3 million. Meanwhile, the electric vehicle maker lost $3.35 per share.
The company also announced that it ended the quarter with a cash cushion of $3.2 billion. The quarterly capital costs were $655.7 million.
Analysts explained that the losses are spurred by the lack of revenues from Tesla’s much-anticipated Model 3. Meanwhile, the Silicon Valley firm keeps pouring money into the assembly line and other projects, like its ambitious Gigafactory and the Model Y.
Tesla’s only projects that were completed in recent months are a Tesla semi and a new Roadster model.
$2 Billion Wiped Out from Tesla’s Market Value on Wednesday
Also, the company lost $2 billion in market value on Wednesday after its founder and CEO Elon Musk refused to respond to analysts’ questions about Tesla’s profitability. On Wednesday, Musk’s lack of cooperation with analysts sent the company’s stock down 5%, leading to a loss of $2 billion.
Musk assured investors that there wouldn’t be any more delays for the Model 3. The company’s future depends on the car, and Musk is confident that the model will lead to positive cash flows in the coming months.
In the second quarter, the Tesla assembly plant in Fremont, California will be shut down for 10 days. By the end of June, the factory is expected to churn out 5,000 Model 3 cars each day.
Profits should start appearing in the second half of the year. But until then, Tesla will have to address the production losses for the Model 3. So far, every car built by the company is accompanied by a $22,500 pre-tax loss.
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