FILE - In this April 15, 2018, file photo, the sun shines off the rear deck of a roadster on a Tesla dealer’s lot in the south Denver suburb of Littleton, Colo. (AP Photo/David Zalubowski, File)

Tesla burns $739.5 million in cash on way to record 2Q loss

Tesla’s second-quarter revenue should grow by more than $1 billion as it delivered more Model 3 electric cars.

Electric car maker Tesla Inc. burned through $739.5 million in cash last quarter, paving the way to a company record $717.5 million net loss as it cranked out more electric cars.

But CEO Elon Musk pledged to post net profits in future quarters, and on a conference call, he apologized to two analysts he cut off on the company’s first-quarter call. Telsa’s shares jumped 9.3 per cent to $328.85 in after-hours trading.

The net loss more than doubled from the same quarter a year ago, and was slightly larger than the first quarter. But Tesla’s cash burn in the second quarter slowed from about $1.1 billion.

On the call, Musk also said he expects the company to avoid returning to the markets for capital and to be “essentially self-funding on a go-forward basis.” Tesla would use money generated from sales to fund big projects such as an estimated $2 billion new factory in China and another plant in Europe, he said.

The company also said that Model 3 gross profit margins turned slightly positive during the quarter as it worked out expensive kinks in its manufacturing system.

Last quarter, Musk mistreated two analysts by calling their queries about the company’s cash needs and Model 3 orders “so dry” and “not cool.” The call triggered a stock sell-off and raised questions about Musk’s behaviour.

But on Wednesday, a contrite Musk apologized to both and said he was tired from working more than 110 hours per week last quarter. “It’s not right,” he told an analyst from RBC Capital Markets. “Hope you accept my apologies.”

Related: Elon Musk apologizes for calling cave rescue diver a ‘pedo’

Related: Elon launches Tesla into space

In a statement released after the markets closed Wednesday, Tesla said it expects to produce 50,000 to 55,000 Model 3s in the third quarter, an increase of at least 75 per cent from the first quarter.

Tesla spent millions as it reached a goal of producing 5,000 Model 3 sedans per week by the end of June. It now says production is rising, with the goal of 6,000 per week by the end of August. The company said it expects to reach 10,000 Model 3s per week “sometime next year.”

Cash from selling the Model 3, which starts at $35,000 but runs far higher with options, is key to holding off more borrowing and turning a profit.

Tesla’s cash balance fell to $2.2 billion in June, from $2.7 billion in the first quarter.

Musk said he expects the company to achieve sustained quarterly net profits from now on, barring an unforeseen event, supplier problems or economic downturn. He also said that production efficiencies should rise as more Model 3s are built, and he said that he expects to make to around 750,000 vehicles in calendar year 2020.

The company said it has cut back on capital spending by changing its strategy to produce the Model 3 on existing assembly lines, one in a giant tent, rather than adding all-new lines. Tesla projected total 2018 capital spending at just below $2.5 billion. That’s substantially less than the 2017 level of $3.4 billion.

The Palo Alto, California, company said it lost $4.22 per share from April through June as revenue grew 43 per cent to just over $4 billion. Adjusted for stock-based compensation, the company lost $3.06 per share. That was worse than Wall Street estimates. Analysts polled by FactSet expected a $2.88 loss per share.

Tesla also said it’s working on a new version of its Autopilot semi-autonomous software that will have greater safety features.

During the second quarter, Tesla laid off 9 per cent of its workforce as it worked toward Musk’s promise of making money. The company has never turned an annual profit and has had only two profitable quarters since becoming public in 2010. Tesla has also asked parts suppliers for refunds.

Tom Krisher, The Associated Press

Like us on Facebook and follow us on Twitter.

Just Posted

Slocan Valley to be ‘lit up’ with high-speed internet in 12 months

125 kilometres of fibre-optic cable to be laid from Nakusp to Playmore Junction

Nakusp’s new Caribou Society wants a say in management of animals

Community input is necessary for effective protection, say proponents

Paramedics union raises alarm over spike in out-of-service ambulances

Staffing shortages affecting service levels in Kootenays

Update: Car located in Pend d’Oreille River, teenagers remain missing

A fundraiser has been set up at Kootenay Savings in Fruitvale to help support the family

Two missing in Pend d’Oreille crash

A 15-year-old male and 18-year-old female both from Fruitvale are missing and presumed deceased

Sparks fly as SUV speeds down wrong side of Highway 1 trying to flee RCMP

Captured on video, the vehicle headed westbound against oncoming traffic before crashing

Fundraising campaign launched for man caught in SilverStar avalanche

In only two days, the GoFundMe surpassed its $15,000 goal

Terror at sea: Helicopter rescues frightened cruise passengers in Norway

The Viking Sky cruise ship was carrying 1,300 passengers and crew when it experienced engine trouble

Search and rescue team helicopters injured climber from B.C. provincial park

A 30-year-old woman suffered a suspected lower-limb fracture in Skaha Bluffs Provincial Park

DOJ: Trump campaign did not co-ordinate with Russia in 2016

Attorney General William Barr said special counsel “does not exonerate” Trump of obstructing justice

Trudeau in Vancouver to support Tamara Taggart at Liberal nomination event

The former broadcaster is seeking the nomination for the Vancouver Kingsway riding

Trudeau calls May 6 byelection for B.C. riding of Nanaimo-Ladysmith

The riding opened up when Sheila Malcolmson resigned in January

B.C. VIEWS: The hijacking of our education system gathers speed

Children taught to strike and shout fringe far-left demands

Judges on Twitter? Ethical guidance for those on the bench under review

Canadian judges involvement in community life are among issues under review

Most Read