Tesla Inc (NASDAQ: TSLA) stock lost over 4.6% in the after-hours market on May 2nd, 2018 after the company in the first quarter of FY 18 has reported a loss of US$3.35 for the opening three months of 2018, which is less than the US$3.58 loss analysts had initially were expecting. There are also concerns over its cash burn, huge debt pile and production issues remain.
However, the company had reported the adjusted revenue growth of 35.9 percent to $3.4 billion in the first quarter of FY 18, beating the analysts’ estimates for revenue of $3.22 billion.
Further, TSLA has reconfirmed the production guidance of 5,000 Model 3s a week by the end of the second quarter, but warned it has previously ‘demonstrated the difficulty of accurately forecasting production rates’. Tesla had expected to produce 2,500 Model 3s by the end of the quarter but was forced to backtrack on that as it grappled with production issues in its factory. The company was actually managed to produce 2,020 in the final week of the quarter, although that was still below Bloomberg’s Model 3 tracker which had expected the company to be making 2,323.
Moreover, it Tesla achieves 5,000 mark, it will help the company deliver on one of Musk’s big claims, about Tesla achieving full GAAP profitability in the third and fourth quarters. Therefore, Musk claims are based on the company’s ability to reach Model 3 production volume of 5,000 units per week and to grow Model 3 gross margin from slightly negative in Q1 2018 to close to breakeven in Q2 and then to highly positive in Q3 and Q4. In addition, several analysts were expecting that Tesla need to raise billions of dollars more this year, but Elon Musk has disputed this, claiming that because it expects to be cashflow-positive by the end of the third quarter, therefore there is no need to raise money. At the end of the quarter, Tesla had US$2.7bn of cash in the bank. The company has lowered its full-year capex projection to US$3bn from US$3.4bn.
On the other hand, TSLA is being sued for more than $2 billion by electric-hydrogen truck startup Nikola Motor Co., which the company claimed that its patents were infringed. In a lawsuit filed few days back in Arizona, Nikola claims Tesla copied the design of its big rigs, which Nikola first unveiled in May 2016.