Tesla says its days of burning cash are coming to an end as it reports another loss

  • Tesla reported a smaller loss than analysts had expected in the first quarter.
  • The company forecast that it would achieve profitability and a positive free-cash flow during the third and fourth quarters, ending an era of cash burn.
  • Tesla said it aims to produce 5,000 Model 3 sedans per week by July, and acknowledged that it’s had difficulty meeting its targets in the past.

Tesla on Wednesday reported a smaller loss than analysts had expected during the first quarter even as it ramped up production of its Model 3 sedan.

Tesla said it aimed to achieve profitability and a positive cash flow by the third and fourth quarters, turning around an era of cash burn that has fuelled scepticism about the electric-car and solar-panel maker.

The company reported an adjusted loss per share of $US3.35 on revenue of $US3.41 billion. Analysts had forecast an adjusted loss of $US3.42 on revenues of $US3.32 billion, according to Bloomberg.

Tesla had $US2.67 billion in cash on hand at the end of Q1, down from $US3.37 billion at the end of last year. It burned through $US1.05 billion in the first quarter.

Tesla said it aims to produce 5,000 Model 3 sedans per week by July, and acknowledged that meeting its forecasts has historically been difficult. The earnings release showed Tesla produced 2,270 Model 3s per week in April.

The company’s earnings came after a slew of headlines that have hurt its stock price this year, including a fatal crash and subsequent NTSB investigation, “production hell” for its Model 3 sedan, and an exposé of dangerous factory floor conditions.

The earnings were also a test for short sellers, who had piled on record bets that Tesla’s stock price will fall. As of Wednesday, 39.42 million Tesla shares were borrowed for short bets, representing 31% of the shares available for trading, according to the financial-analytics firm S3 Partners.

Tesla shares gained nearly 3% in volatile after-hours trading. The stock rose to as high as $US306.85 per share in regular trading, breaching the key $US300 resistance level.

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