Photo: Stefan Baldauf / Guido ten Brink
It was a very busy week for the world’s iconic electric carmaker, Tesla. It started on a high note on Monday, with Elon Musk outlining plans for the future, but reached a dramatic climax as the financial results for the first quarter of the year were released on Wednesday.
If we didn’t know better, we’d think Musk's presentation on the first day of the week was designed to soften the blow of a negative financial performance, by announcing a million autonomous cars on the roads next year. But on Wednesday, the company announced its financial proficiency for the first three months of the year, and it’s all dramatic.
In spite of the positive way in which the company came out of 2018, at the end of March 2019 Tesla posted a net loss of $702 million, including $188M of non-recurring charges, and exceeding some of the most pessimistic expectations of the market.
The loss, huge for a carmaker the size of Tesla, comes on the background of an increased production of cars. In the first quarter, there were some 63,000 electric cars made, a rise of 3 percent over the previous quarter and an encouraging sign the company might meet its 400,000 targets for this year.
The carmaker blames part of the loss in the past few months on dropping prices, the start of production overseas and the reduction of the tax credit.
“This required significant effort for Tesla and resulted in an inventory build for overseas markets at the front half of the quarter, with shipments loaded into the back half of the quarter,” the carmaker said according to Clean Technica.
“The last 10 days of the quarter, specifically, saw the bulk of the deliveries as Tesla pushed to unload the inventory it had built up in the front half of the quarter. Dropping prices in Q1 puts pressure on automotive margins. We need to work through this in Q2, impacting profitability.”
In spite of the positive way in which the company came out of 2018, at the end of March 2019 Tesla posted a net loss of $702 million, including $188M of non-recurring charges, and exceeding some of the most pessimistic expectations of the market.
The loss, huge for a carmaker the size of Tesla, comes on the background of an increased production of cars. In the first quarter, there were some 63,000 electric cars made, a rise of 3 percent over the previous quarter and an encouraging sign the company might meet its 400,000 targets for this year.
The carmaker blames part of the loss in the past few months on dropping prices, the start of production overseas and the reduction of the tax credit.
“This required significant effort for Tesla and resulted in an inventory build for overseas markets at the front half of the quarter, with shipments loaded into the back half of the quarter,” the carmaker said according to Clean Technica.
“The last 10 days of the quarter, specifically, saw the bulk of the deliveries as Tesla pushed to unload the inventory it had built up in the front half of the quarter. Dropping prices in Q1 puts pressure on automotive margins. We need to work through this in Q2, impacting profitability.”
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