Tesla burns through the most cash in its history

Tesla Model 3
Tesla Model 3 Timothy Artman/Tesla

Tesla burned through a record amount of cash in the second quarter as it prepared to unveil its Model 3 sedan.

The company’s earnings statement released Wednesday showed that Tesla’s negative free cash flow expanded to a record -$US1.2 billion from -$US622.4 million a year earlier.

The stakes are high for Tesla’s first mass-market car priced at $US35,000. Tesla on Wednesday said production was on track to hit its targets, and that over 1,800 vehicles were being ordered daily on net.

Tesla has typically burned through more cash than traditional auto makers as it strived to remain at the forefront of innovation in the electric-car space.

In the second quarter, Tesla increased spending on research and development by 92% to $US369.8 million.

“Capital expenditures should be about $US2 billion during the second half of 2017, as we make milestone-based payments for Model 3 equipment” and other products, the company wrote.

Tesla’s earnings further showed that the company reported a smaller-than-expected loss and beat analysts’ estimates for revenues.

Tesla free cash flow

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