Published: Thu, August 02, 2018
Finance | By Jaime Brady

Elon Musk says sorry, starts acting like a real CEO

Elon Musk says sorry, starts acting like a real CEO

Tesla had a record loss of $718 million in the second quarter, but investors and analysts focused on the positives, and more importantly on Musk's behavior on the conference call.

In the previous quarter, Musk called questions posed by two analysts "boring" and "boneheaded", and refused to answer them.

The shares surged as much as 9.2 per cent as of 6:25 am NY time Thursday, before the start of regular trading.

The net loss of $717.5m (£547.6m) more than doubled that from the same period past year, and was slightly larger than the first quarter loss.

Tesla burned through less cash than Wall Street feared in the second quarter, sending shares higher after the close of regular trading.

On the call, Musk also said he expects the company to avoid returning to the markets for capital and to be "essentially self-funding on a go-forward basis".

The company would use money generated from sales to fund big projects such as the $2bn (£1.5bn) new factory in China and another plant in Europe, he said.

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The company also said that Model 3 gross profit margins turned slightly positive during the quarter as it worked out expensive kinks in its manufacturing system. In Q2, the company delivered 18,449 Model 3 vehicles, up from 8,182 last quarter.

But on Wednesday, a contrite Mr Musk apologised to both and said he was exhausted from working more than 110 hours per week last quarter. Previously, he insulted some analysts - turning off investors and shareholders, and knocking $2 billion off the company's market cap. "Hope you accept my apologies".

Tesla is focusing on increasing production of its affordable Model 3 electric vehicle.

Thus far, Tesla has only produced higher-cost versions of the Model 3, starting at about $49,000.

Tesla said that during July it had hit an earlier goal of building about 5,000 Model 3s per week "multiple times", and reiterated a target of producing 6,000 per week by late August.

Tesla ended June with about $2.2 billion in cash, the least it's carried since the first quarter of 2016. The CEO carried out a reorganization last quarter and announced that 9 per cent of the company's workforce would be dismissed. Analysts polled by FactSet expected a $US2.88 loss per share.

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