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Drop In Model 3 Deliveries Forces Tesla A Loss Of $702 Million In Q1 Of 2019


04/25/2019


Drop In Model 3 Deliveries Forces Tesla A Loss Of $702 Million In Q1 Of 2019
United States based electric car maker Tesla posted a loss of $702 million for the first three months of 2019, the company said in an official filing. The company had reported its first ever back-to-back profits in the last two quarters of 2018.
 
In a call with the media in February, Tesla CEO Elon Musk had forecast that the company would move into the red. 
 
Compared to the revenue of $7.2 billion generated by Tesla in the last quarter of 2018, it earned revenues of $4.5 billion in the quarter. In the same quarter a year earlier,  the company had generated revenues of only $2.6 billion.
 
Tesla also does not expect to make a profit in the second quarter of the current year as well, it announced. Earlier, Musk had expressed optimism about Tesla continuing ot make profits starting the first quarter of 2019. However the loss announced by the company for the quarter was the fourth-worst quarterly performance since the company had gone public in 2010.
 
“Everyone expected a Q1 loss for Tesla, but nobody expected it to be this big,” Karl Brauer, the executive publisher at Kelley Blue Book and Autotrader, said in a statement.
 
At the end of the current quarter, Tesla had $1.5 billion less cash compared to what it had at the end of the last quarter of 2018. However, the company used the cash to repay a debt of $920 million at the end of March. Customer deposits for vehicles like the Model 3, Model Y, second generation Roadster, Tesla Semi, and its energy products accounted for $768 million of the $2.2 billion total cash. Moving forward, the company would increase the cash balance every quarter. Tesla said.
 
63,000 vehicles were delivered in the first quarter, Tesla said which was its forecast at the beginning of the month. But compared to the 90000 units delivered in previous quarter, the deliveries in the first quarter of 2019 was much lower. The issues faced by the company in its shift of focus of delivering the Model 3 in two new markets - Europe and China, was the primary reason for the decline in delivery, Tesla had explained earlier.
 
The challenges faced by the company in shipping three car models from its single factory in the US to markets around the globe was marked out by Musk in the call with investors on Wednesday. These challenges impacted the results of the first quarter.
 
“This is the most difficult logistics problem I’ve ever seen, and I’ve seen some tough ones,” he said.
 
New CFO Zach Kirkhorn called it “one of the most complicated quarters that I can think of in the history of the company”. The company hopes that it would be able to deliver between 90,000 and 100,000 quarterly starting in the second quarter of 2019, Tesla said on Wednesday.
 
(Source:www.theverge.com)