Tesla posts Q1 net loss of $700M

Tesla will launch its first fleet of autonomous robotaxis by 2020

Tesla CEO Elon Musk had prepped Wall Street for a first quarter loss but analysts were still stunned by its size: $702.1 million, among the company's worst quarters in the past two years.

CEO Elon Musk past year predicted quarterly profits in the future.

The Q1 sales report, released April 3, did not put the company in the best light.

"We have direct knowledge of the risk profile of customers and the vehicle", he explained during today's teleconference with financial analysts. Tesla has guaranteed the value of the cars after certain time periods and will buy them back for a guaranteed price. That could help ease the pain for Tesla's accountants as well as for investors, who have seen share prices slump due to concerns about long-term profitability. The losses amount to a $2.90 hit per share. That's 13 percent worse than the year-ago figure and four times as much as what some analysts were expecting. Revenue rose nearly 40 percent over a year ago, but it still fell short of analyst estimates of $5.42 billion.

Musk said that global deliveries were "the most hard logistics problem" he had ever seen.

Tesla had cited a "massive increase in deliveries in Europe and China" and said the delivery issues were because of challenges encountered in the first quarter it was making deliveries in those markets. For example, on the Model S and X, Tesla reported a $121 million net loss largely because of forecast returns and buyback guarantee programs. One disincentive to sales was the gradual phase-out of federal tax credits for electric vehicles.




Musk is still battling to convince investors that demand for the Model 3, the sedan hoped to propel Tesla to sustainable profit, is "insanely" high, and that it can be delivered efficiently and swiftly to customers around the world.

Heightening uncertainty during the quarter were logistics bottlenecks at global ports, price adjustments on vehicles and a surprise announcement, later reversed, to close most of Tesla's stores in order to financially offset the introduction of the $35,000 Model 3. "This is an aggressive schedule, but it is what we are targeting".

The company, which many analysts predict will need to raise funds for its expansion, said it ended its first quarter with $2.2 billion in cash after paying off a $920 million convertible bond obligation in March.

Tesla finished the quarter with US$768 million in customer deposits, holding fairly steady relative to the US$793 million at the end of past year.

One analyst asked Musk whether he wished that he had persevered with efforts to take Tesla private a year ago - efforts that ended up getting him in hot water with the Securities and Exchange Commission. The vehicles also will get new suspensions, faster acceleration and more comfortable rides, Tesla said.

Musk told analysts that "at this point I do think there is some merit to raising capital", but he didn't provide further details.

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