Tesla Shares Plummet on Further Cash Burn and Massive Losses

After Tesla Inc shares suffered and started the year with a series of concerns from investors and customers regarding its production and deliveries that have missed forecasts and estimates during the past couple of quarters, Tesla shares are seen down by more than 7% during the recent trading session due to another disappointing quarterly earnings report.

Tesla shares which recently recovered back up the $300 per share level are now trading at around $284.45. The stock have pushed past $300 last year due to the overwhelming number of stock price upgrade from analysts which were led by the optimism on the Model 3 release.

Tesla have recently faced an investigation regarding the safety of its Fremont factory. However, the company which has just reported then that its production has been rising and is close to meeting its latest targets which led to the shares trading by more than 2% to recover above $300 per share.

First Quarter Losses

For the company’s first quarter financial results, Tesla posted that it was able to produce as much as 2,270 Model 3 vehicles every week in April for three consecutive weeks which was led by their efforts in ramping up the production of the mass-market vehicle. Tesla have missed its own targets for a couple of quarters since the vehicle’s official launch last year due to the massive number of pre-orders and reservations.

Currently, Tesla reported that the Model 3 is set to be one of the best-selling midsize premium sedans in the United States with their growing and rising delivery rate. Tesla also attributed the success of the affordable electric vehicle to the general demand for electric vehicles which are becoming more appealing to customers compared to internal combustion engines.

Tesla delivered a revenue of $3.41 billion which is better than analyst forecasts of $3.2 billion. Tesla’s adjusted loss of $3.35 per share also beats analyst estimates of $3.37 per share in losses. Some analysts also expected a loss of $3.54 per share on a revenue of $3.28 billion. 

By the end of the quarter, Tesla posted a cash balance of $2.7 billion which is down from their cash balance of $3.4 billion during the previous quarter of the end of 2017. Tesla announced its plans to cut its capital expenditures by around $3 billion this year from $3.4 billion.

During the upcoming quarters, Tesla is expected to show an improvement on its vehicle production. The company currently has a target of delivering 100,000 vehicles for the whole year composed of the Model 3 as well as its flagship vehicles Model S and Model X.

Read also: Tesla to Use SpaceX for Data Management

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