Tesla investors gave a rare rebuke to chief executive Elon Musk on Wednesday after he cut off analysts asking about profit potential, sending shares down 5 per cent despite promises that production of the troubled Model 3 electric car was on track.
Tesla’s future depends on the Model 3 and the company said that it had largely overcome production bottlenecks, with Mr Musk vowing a dramatic turnaround that would reverse losses and generate positive cash flow in just a few months.
Mr Musk plans to shut down its Fremont, California factory for 10 days in the second quarter but said Tesla will meet the production target of 5,000 Model 3s per day by the end of June, as planned, and will turn a profit in the second half of the year.
To achieve profitability, Mr Musk will have to reverse what today amounts to a $22,584 pre-tax loss per vehicle built by the Silicon Valley company. Tesla posted its biggest-ever quarterly loss when it announced first-quarter results on Wednesday.
Tesla stock was little changed after the earnings announcement but fell during a conference call, when Mr Musk began cutting analysts’ questions short, costing Tesla over $2bn in market capitalisation.
“These questions are so dry. They’re killing me,” Mr Musk said after an analyst asked what percentage of Tesla 3 reservation holders have started to configure options for their cars, an indicator of how much profit Tesla will be able to wring from the vehicles. Another analyst asked about a capital requirement before being cut off.
He then took several questions in a row about plans for a self-driving car network and other long-term projects from the host of a YouTube channel focused on investing, praising the questions as not boring.
Musk’s ability to run Tesla is crucial as the company strives to efficiently and profitably build its first vehicle intended to be produced at high volume, the Model 3.
Mr Musk acknowledged error recently in over-automating the Model 3 assembly-line, which has resulted in production delays, but it is still unclear how long and costly it will be to unwind this mistake.
Delayed Model 3 production also comes as a slew of competitors bring new electric vehicle models to market. The company stood by a previously announced target of building 5,000 Model 3s per week by the end of June.
Tesla's capital expenditures declined in the quarter and the company cut its spending forecasts for 2018, saying it would spend less than $3bn. Tesla spent $3.4bn in 2017.
Investing.com analyst Clement Thibault said the reduction was noteworthy, “but in the long run given challenges that lay ahead of Tesla, I don’t think it is going to make or break the company.”
Tesla “is definitely not in a minimizing cost stage,” Mr Thibault said.
Free cash flow, a key metric of financial health, widened to negative $1bn in the first quarter from negative $277 million in the fourth quarter, excluding costs of systems for its solar business. Analysts had not expected so much spending, predicting hundreds of millions of dollars less in so-called cash burn, according to Thomson Reuters data.
Tesla did not break out a cash flow calculation that it had included in previous quarters.
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Read more:
Tesla halts production on Model 3
Extricating chief Ghosn from Renault-Nissan-Mitsubishi knot no easy task
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The niche carmaker, which two years ago vowed to build 500,000 vehicles annually in 2018, has attracted legions of fans for its advanced technology and design. But the company rushed its Model 3 to market, making mistakes in manufacturing whose effects are now being felt, and investor skepticism has risen.
Questions over Tesla’s finances are top of mind, and many analysts anticipate a capital raise in 2018 despite Musk’s statements that it will not be necessary due to profitability and positive cash flow in the third or fourth quarters.
Tesla said gross margins on the Model 3, which today are slightly negative, would be close to flat in the second quarter and grow to “highly positive” in the second half of the year.
Tesla said it produced 2,270 Model 3s per week in the last week of April. It said net reservations for the Model 3, including configured orders not yet delivered, exceeded 450,000 at the end of the first quarter.
Automotive revenue rose only 1 per cent from the prior quarter to $2.74bn.
Tesla reported a record loss of $709.6m, or $4.19 per share, for the first quarter ended March 31, compared with a loss of $330.3 million, or $2.04 per share, a year earlier.
Excluding items, Tesla had a loss of $3.35 per share. Analysts had expected a loss of $3.58 per share.
The company said it ended the quarter with $3.2bn in cash after spending $655.7m in quarterly capital expenses.
The lack of Model 3 revenue has exacerbated Tesla’s cash burn as the company continues to spend on its assembly line and prepares for new investments on multiple projects in the pipeline, such as the Model Y crossover and its Gigafactory.
The Model Y is just one of many projects in the pipeline for Tesla, which also launched a Tesla Semi and a new Roadster in recent months.
Key facilities
- Olympic-size swimming pool with a split bulkhead for multi-use configurations, including water polo and 50m/25m training lanes
- Premier League-standard football pitch
- 400m Olympic running track
- NBA-spec basketball court with auditorium
- 600-seat auditorium
- Spaces for historical and cultural exploration
- An elevated football field that doubles as a helipad
- Specialist robotics and science laboratories
- AR and VR-enabled learning centres
- Disruption Lab and Research Centre for developing entrepreneurial skills
Specs
Engine: 51.5kW electric motor
Range: 400km
Power: 134bhp
Torque: 175Nm
Price: From Dh98,800
Available: Now
KILLING OF QASSEM SULEIMANI
House-hunting
Top 10 locations for inquiries from US house hunters, according to Rightmove
- Edinburgh, Scotland
- Westminster, London
- Camden, London
- Glasgow, Scotland
- Islington, London
- Kensington and Chelsea, London
- Highlands, Scotland
- Argyll and Bute, Scotland
- Fife, Scotland
- Tower Hamlets, London
Wenger's Arsenal reign in numbers
1,228 - games at the helm, ahead of Sunday's Premier League fixture against West Ham United.
704 - wins to date as Arsenal manager.
3 - Premier League title wins, the last during an unbeaten Invincibles campaign of 2003/04.
1,549 - goals scored in Premier League matches by Wenger's teams.
10 - major trophies won.
473 - Premier League victories.
7 - FA Cup triumphs, with three of those having come the last four seasons.
151 - Premier League losses.
21 - full seasons in charge.
49 - games unbeaten in the Premier League from May 2003 to October 2004.
The specs
Engine: 3-litre twin-turbo V6
Power: 400hp
Torque: 475Nm
Transmission: 9-speed automatic
Price: From Dh215,900
On sale: Now
UAE currency: the story behind the money in your pockets
UAE%20FIXTURES
%3Cp%3EWednesday%2019%20April%20%E2%80%93%20UAE%20v%20Kuwait%3Cbr%3EFriday%2021%20April%20%E2%80%93%20UAE%20v%20Hong%20Kong%3Cbr%3ESunday%2023%20April%20%E2%80%93%20UAE%20v%20Singapore%3Cbr%3EWednesday%2026%20April%20%E2%80%93%20UAE%20v%20Bahrain%3Cbr%3ESaturday%2029%20April%20%E2%80%93%20Semi-finals%3Cbr%3ESunday%2030%20April%20%E2%80%93%20Third%20position%20match%3Cbr%3EMonday%201%20May%20%E2%80%93%20Final%3C%2Fp%3E%0A
RESULTS
6.30pm Al Maktoum Challenge Round-2 – Group 1 (PA) $49,000 (Dirt) 1,900m
Winner RB Frynchh Dude, Pat Cosgrave (jockey), Helal Al Alawi (trainer)
7.05pm Al Bastakiya Trial – Conditions (TB) $50,000 (D) 1,900m
Winner El Patriota, Vagner Leal, Antonio Cintra
7.40pm Zabeel Turf – Listed (TB) $88,000 (Turf) 2,000m
Winner Ya Hayati, Mickael Barzalona, Charlie Appleby
8.15pm Cape Verdi – Group 2 (TB) $163,000 (T) 1,600m
Winner Althiqa, James Doyle, Charlie Appleby
8.50pm UAE 1000 Guineas – Listed (TB) $125,000 (D) 1,600m
Winner Soft Whisper, Frankie Dettori, Saeed bin Suroor
9.25pm Handicap (TB) $68,000 (T) 1,600m
Winner Bedouin’s Story, Frankie Dettori, Saeed bin Suroor
The specs: Lamborghini Aventador SVJ
Price, base: Dh1,731,672
Engine: 6.5-litre V12
Gearbox: Seven-speed automatic
Power: 770hp @ 8,500rpm
Torque: 720Nm @ 6,750rpm
Fuel economy: 19.6L / 100km
The five pillars of Islam
The specs
Engine: 2.0-litre turbo 4-cyl
Transmission: eight-speed auto
Power: 190bhp
Torque: 300Nm
Price: Dh169,900
On sale: now
Jiu-jitsu calendar of events for 2017-2018:
August 5:
Round-1 of the President’s Cup in Al Ain.
August 11-13:
Asian Championship in Vietnam.
September 8-9:
Ajman International.
September 16-17
Asian Indoor and Martial Arts Games, Ashgabat.
September 22-24:
IJJF Balkan Junior Open, Montenegro.
September 23-24:
Grand Slam Los Angeles.
September 29:
Round-1 Mother of The Nation Cup.
October 13-14:
Al Ain U18 International.
September 20-21:
Al Ain International.
November 3:
Round-2 Mother of The National Cup.
November 4:
Round-2 President’s Cup.
November 10-12:
Grand Slam Rio de Janeiro.
November 24-26:
World Championship, Columbia.
November 30:
World Beach Championship, Columbia.
December 8-9:
Dubai International.
December 23:
Round-3 President’s Cup, Sharjah.
January 12-13:
Grand Slam Abu Dhabi.
January 26-27:
Fujairah International.
February 3:
Round-4 President’s Cup, Al Dhafra.
February 16-17:
Ras Al Khaimah International.
February 23-24:
The Challenge Championship.
March 10-11:
Grand Slam London.
March 16:
Final Round – Mother of The Nation.
March 17:
Final Round – President’s Cup.
COMPANY PROFILE
Name: Kumulus Water
Started: 2021
Founders: Iheb Triki and Mohamed Ali Abid
Based: Tunisia
Sector: Water technology
Number of staff: 22
Investment raised: $4 million
Brief scores:
Liverpool 3
Mane 24', Shaqiri 73', 80'
Manchester United 1
Lingard 33'
Man of the Match: Fabinho (Liverpool)
The specs: 2018 Maxus T60
Price, base / as tested: Dh48,000
Engine: 2.4-litre four-cylinder
Power: 136hp @ 1,600rpm
Torque: 360Nm @ 1,600 rpm
Transmission: Five-speed manual
Fuel consumption, combined: 9.1L / 100km
Pakistanis%20at%20the%20ILT20%20
%3Cp%3EThe%20new%20UAE%20league%20has%20been%20boosted%20this%20season%20by%20the%20arrival%20of%20five%20Pakistanis%2C%20who%20were%20not%20released%20to%20play%20last%20year.%20%0D%3Cbr%3E%0D%0D%0D%3Cbr%3E%3Cstrong%3EShaheen%20Afridi%20(Desert%20Vipers)%20%3C%2Fstrong%3E%0D%3Cbr%3ESet%20for%20at%20least%20four%20matches%2C%20having%20arrived%20from%20New%20Zealand%20where%20he%20captained%20Pakistan%20in%20a%20series%20loss.%20%0D%3C%2Fp%3E%0A%3Cp%3E%3Cstrong%3EShadab%20Khan%20(Desert%20Vipers)%20%3C%2Fstrong%3E%0D%3Cbr%3E%0DThe%20leg-spin%20bowling%20allrounder%20missed%20the%20tour%20of%20New%20Zealand%20after%20injuring%20an%20ankle%20when%20stepping%20on%20a%20ball.%20%0D%3C%2Fp%3E%0A%3Cp%3E%3Cstrong%3EAzam%20Khan%20(Desert%20Vipers)%20%3C%2Fstrong%3E%0D%3Cbr%3EPowerhouse%20wicketkeeper%20played%20three%20games%20for%20Pakistan%20on%20tour%20in%20New%20Zealand.%20He%20was%20the%20first%20Pakistani%20recruited%20to%20the%20ILT20.%20%0D%3C%2Fp%3E%0A%3Cp%3E%3Cstrong%3EMohammed%20Amir%20(Desert%20Vipers)%20%3C%2Fstrong%3E%0D%3Cbr%3EHas%20made%20himself%20unavailable%20for%20national%20duty%2C%20meaning%20he%20will%20be%20available%20for%20the%20entire%20ILT20%20campaign.%20%0D%3C%2Fp%3E%0A%3Cp%3E%3Cstrong%3EImad%20Wasim%20(Abu%20Dhabi%20Knight%20Riders)%20%3C%2Fstrong%3E%0D%3Cbr%3EThe%20left-handed%20allrounder%2C%2035%2C%20retired%20from%20international%20cricket%20in%20November%20and%20was%20subsequently%20recruited%20by%20the%20Knight%20Riders.%26nbsp%3B%3C%2Fp%3E%0A
How they line up for Sunday's Australian Grand Prix
1 Lewis Hamilton, Mercedes
2 Kimi Raikkonen, Ferrari
3 Sebastian Vettel, Ferrari
4 Max Verstappen, Red Bull
5 Kevin Magnussen, Haas
6 Romain Grosjean, Haas
7 Nico Hulkenberg, Renault
*8 Daniel Ricciardo, Red Bull
9 Carlos Sainz, Renault
10 Valtteri Bottas, Mercedes
11 Fernando Alonso, McLaren
12 Stoffel Vandoorne, McLaren
13 Sergio Perez, Force India
14 Lance Stroll, Williams
15 Esteban Ocon, Force India
16 Brendon Hartley, Toro Rosso
17 Marcus Ericsson, Sauber
18 Charles Leclerc, Sauber
19 Sergey Sirotkin, Williams
20 Pierre Gasly, Toro Rosso
* Daniel Ricciardo qualified fifth but had a three-place grid penalty for speeding in red flag conditions during practice
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