Business

Tesla reports $700M 1st-quarter losses with more trouble to come

Tesla Inc. reported a $700 million loss on Wednesday for the first quarter and said it would also lose money in the second as it struggled to deliver cars to customers and launch a cheaper version of its Model 3 sedan.

Company said it would also lose money in 2nd quarter as it struggles to deliver its cheaper Model 3 sedan

In this March 14 file photo Tesla CEO Elon Musk speaks at Tesla's design studio in Hawthorne, Calif. The company reported steep losses in its 1st quarter and expects more of the same as it struggles with production problems. (Jae C. Hong/The Associated Press)

Tesla Inc. said on Wednesday it would return to profit in the third quarter of 2019 after racking up two consecutive losses in the first half of the year, as it struggled to deliver cars to customers and launch a cheaper version of its Model 3 sedan.

The company, which Wall Street suspects may soon have to raise more cash, said it ended the quarter with just $2.2 billion US in cash, after paying off a $920 million convertible bond obligation in March.

Tesla, however, affirmed its outlook of delivering 360,000 to 400,000 vehicles in 2019 and said it may produce as many as 500,000 vehicles in the year if its Gigafactory in Shanghai reaches volume production in the fourth quarter.

Shares of the company, down more than 20 per cent this year, rose 1.7 percent to $263 in trading after the bell.

Tesla reported net loss attributable to common shareholders of $702.1 million, or $4.10 per share, in the first quarter ended March 31, compared with $709.6 million, or $4.19 per share, a year earlier.

"As the impact of higher deliveries and cost reduction take full effect, we expect to return to profitability in Q3 and significantly reduce our loss in Q2," chief executive officer Elon Musk said in a letter to investors.

The Silicon Valley company has weathered a challenging few months, marked by a sharp drop in the number of vehicles delivered to global customers during the quarter and a public spat between Musk and financial regulators.