Tesla reports 'apocalyptic' loss of US $ 702 million: his winning streak ends

[Akrapovic]

The electric car company said on Wednesday it lost $ 702 million in the last quarter. Their income also decreased by 37% compared to the previous quarter.

Wall Street was already preparing for what one analyst called an "apocalyptic" quarter, but the results were much worse than expected.

While the company has recorded losses of this size before, analysts surveyed by Refinitiv predicted that Tesla would have around 301 million dollars in red for the quarter. The real number was more than double that amount.

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Tesla's stock declined slightly after the gains were presented, but then fell back to par.

The company had posted consecutive gains in the two previous quarters. The last quarter, for example, Tesla recorded a profit of $ 139 million in sales of $ 7.2 billion.

There were a couple of reasons why Tesla is so red, according to Karl Brauer, executive editor of Kelley Blue Book and Autotrader.

First, a $ 7,500 federal tax credit was cut in half for Tesla vehicles at the beginning of the year. So brands like Porsche, Audi, Mercedes and Hyundai are entering the electric vehicle market, which gives Tesla significant competition for the first time in the company's history, Brauer said.

"None of these problems, by themselves, would cause the severe drop in sales and revenue that Tesla experienced in the first quarter, but the combination was powerful," Brauer said in an email late Wednesday. "Even more worrisome? None of these problems will disappear. This is the new normal for Tesla. "

CEO Elon Musk said during a conference call with investors that the last quarter may have been difficult, but Tesla has a hopeful outlook. The demand for Tesla's three electric vehicle models is strong, he said.

"We also have many markets [overseas] where we have not yet taken advantage of demand, especially Model 3," Musk said.

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Tesla revealed earlier this month that it delivered about 63,000 vehicles to customers in the first three months of 2019, a drop of 31% compared to the previous quarter, and the largest decline it has reported.

The company said on Wednesday it expects its sales figures to look much better in the next quarter. The company has said it encountered "many challenges" in increasing deliveries of its vehicles overseas, but said those problems should be solved soon and that there could be a big sales blow down the road.

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The slowdown in sales is bad news for Tesla because the company needs cash to pay off its considerable debts. Tesla said he finished the last quarter with 2.2 billion dollars of cash in hand, which the company had previously described as "sufficient."

Executives also said they expect cash stores to "grow steadily" in the coming months.

At one point of the call, Musk briefly alluded to a controversy that has plagued Tesla over the past few months.

In Wednesday's earnings call, an analyst referred to the quarterly reports as a "distraction" that diverts people's attention away from Tesla's leadership and dominance in the electric car market.

Musk laughed and said that he obviously "would prefer that we were a private company (not listed on the stock market)."

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The CEO of Tesla has been in a confrontation with the US Securities and Exchange Commission. (SEC) since he tweeted that he was "considering" the possibility that the auto company was private last year, and that he had obtained funds. The SEC said funding has not been secured, and has accused Musk of cheating investors.

 

Edited May 8, 2019 by Akrapovic;
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