Tesla lost $ 702 million in the first quarter of 2019, after posting consecutive gains for the first time to finish 2018, the company announced in an official presentation on Wednesday. Chief Executive Elon Musk had predicted that Tesla would slide back into the red in a media conference on February 28.
The company also announced that it also does not expect to make a profit in the second quarter. Musk had previously guessed that Tesla would return to profitability as of this quarter. Tesla ended the quarter with $ 2.2 billion in cash, a decrease of $ 1.5 billion since the end of 2018, although $ 920 million was used to pay off the debt due in March. ($ 768 million of that cash is customer deposits).
The loss is a sign that Tesla is still adjusting after a monstrous year of growth in 2018. Tesla went from delivering 1,550 Models 3 in 2017 to approximately 140,000 of them in 2018. The company more than doubled its production of 2017 despite suffering the self-inflicted "hell of production" and the "hell of delivery logistics", and was rewarded with its first profitable quarters in two years (and only the third and fourth).
Since those gains were published, Tesla has wondered whether the demand for Model 3 (as well as Model S and X) has been exhausted in North America. Some Wall Street analysts are especially skeptical, for some reasons. Buyers of the company's cars are no longer eligible for the full federal tax credit of $ 7,500, which means that Tesla cars started the year a little more expensive than they were at the end of 2018. (The company initially it reduced prices by $ 2,000 to help offset the tax credit to $ 3,750, but since then it has made many more changes in its price and availability on all models.)
Musk questioned this in January, saying that "the The demand for Model 3 is incredibly high, the inhibitor is affordability. " To make his way to the affordability side, Tesla finally announced on February 28 that he was making the long-promised $ 35,000 version of Model 3 available for sale. Instead of reaching that price point only through advances in design, manufacturing and engineering, as originally planned, the company announced that it was cutting operating expenses by closing most of its stores, laying off workers and switching to a model of sales only online.
But Tesla recapped later and decided to close only some stores. Now it focuses mainly on online sales, but has not stopped taking them to the store or by phone. Meanwhile, the $ 35,000 version of the car announced in February was never sent. Instead, on April 12, the company said it would take a Model 3 a little higher, that it would use software to limit its functions and scope, and it would sell that version of the car for $ 35,000. Finally it has been sent, but it is only available for purchase in the store or by phone.
The release of Tesla's quarterly earnings results comes in the middle of a wild month of news for the company. A summary:
It is not over yet. Musk and the SEC must submit an update to the judge in his case on Thursday. Earlier this month, that judge asked them to "take a breath" and "come back with [their] reasonability pants" in the hope that the two sides reach an agreement.