San Francisco: Tesla shares revved on Wednesday on news the electric car maker is on the road to being profitable this year despite losing more money than analysts expected in the recently ended quarter.
Tesla shares raced up more than 9 percent to $328.99 in after-market trades that followed release of earnings figures and a call in which chief executive Elon Musk patiently fielded questions and expressed regret for rudely brushing off inquiries from some analysts a quarter earlier.
“I’d like to apologize for being impolite on the last call,” Musk said to an analyst whose query he had dismissed.
“There really is no excuse for bad manners.”
Musk said a lack of sleep and long work days had darkened his mood that day.
The Tesla chief had reacted defensively to questions from the news media and from the financial community, abruptly shutting down questions from analysts during the company’s May conference call on earnings.
Tesla has faced multiple controversies in recent months, many of them stemming from comments made by the mercurial Musk.
– Improving production –
The Silicon Valley-based company reported a $717.5 million loss that was more than twice the $336.4 million it lost in the same quarter a year ago. Revenues meanwhile jumped 43.5 percent to $4.0 billion.
The company also burned through less cash than many analysts expected.
Tesla said its closely-watched ramp-up of production of the Model 3 has hit its stride after earlier missing a series of targets.
Output of the Model 3, the company’s first targeting the middle market and a major gamble for Musk, met a 5,000 per week benchmark in June and repeated that pace “multiple times” in July.
Tesla said it is on track to hit 6,000 vehicles per week by late August and expects to reach 10,000 per week “some time next year.”
Tesla executives said they have started to make a profit on cars, and predicted the “margin” will grow as the company benefits from hard-won production-line efficiencies.
The electric car maker announced in June that it would cut nine percent of its staff in a bid to achieve profitability.
In its earnings statement, Tesla projected that it would reach profitability in the third quarter and stay profitable in the fourth quarter.
“Going forward, we believe Tesla can achieve sustained quarterly profits, absent a severe force majeure or economic downturn, while continuing to grow at a rapid pace,” the company said.
“Our first impression is positive,” said CFRA Research analyst Efraim Levy.
“We like the more muted tone of the company’s outlook, with the absence of unnecessary new stretch goals,” Levy said. “Perhaps it reflects a more cautious Elon Musk.”
– Shanghai bound –
Musk said that Tesla is doing fine on cash and has no plan to raise more funding. The company did plan to take on local debt in China to pay for a new gigafactory in Shanghai to produce vehicles and batteries.
“Other than that, I don’t think we need to raise money,” Musk said.
“We are not in any kind of cash shortage at all.”
He hoped to have the location for a gigafactory in Europe determined by the end of this year.
Musk also said Tesla was working relentlessly to improve self-driving hardware and software, with a focus on safety and security. He promised new capabilities in an upgraded version of the car’s software due out later this year.
Tesla engineers have been working in “semi-stealth mode” for several years making a chip optimized for the intense computing requirements of self-driving technology, according to Musk.
He credited his team with creating one of the world’s most advanced computers designed specifically for autonomous operation, saying it was “super kick-ass.”
Visions for the future at Tesla included a pickup truck, a compact SUV, and a big rig, with the biggest constraint on growth being how fast they can ramp up production of batteries for vehicles, according to the chief executive.
“We have some super stuff coming up,” Musk said.
Musk has been at the center of numerous controversies in recent months as the company has sprinted in an effort to reach ambitious goals.
Earlier this month, Musk apologized for calling British caver Vernon Unsworth, who helped rescue 12 Thai boys from a cave a “pedo,” short for pedophile, after Unsworth spoke dismissively of the Tesla chief’s idea for bringing the boys to safety.
Musk is also embroiled in a legal fight with a former employee whom he accused of sabotage. The ex-employee, Martin Tripp, has countersued for defamatory statements.