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Tesla Posts Huge Losses, But Says The Future Looks Bright

(REUTERS/Bobby Yip)

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Chris White Tech Reporter

Tesla Motors reported large quarterly financial losses Wednesday, leaving company CEO Elon Musk to acknowledge some sobering realities.

The quarterly loss underscores the difficulties Tesla is contending with as it tries to ramp up production of its Model 3, which has nearly 500,000 preorders, and fuse its productive capabilities with SolarCity, another Musk entity.

Tesla said its quarterly loss is $293.2 million, or $2.09 per share, up from about $184.2 million last year.

Musk, who controls a 20 percent stake in each company, said Tesla has been trudging along, pushing hard to meet delivery deadlines and production starting points. He also warned contractors and suppliers that they could endure his wrath if they don’t meet their July 1 Model 3 production dates.

Musk did acknowledge it will be impossible to meet that date. Still, the intrepid techno-brain behind Tesla maintained a slaver driver tone.

“We were in production hell for the first six months of the year,” Musk told analysts during a conference call. “Man, it was hell. And we managed to climb out of hell partway through June and now the production line is humming and our suppliers mostly have their shit together.”

Tesla missed its quarterly delivery mark in July by more than 3,000 vehicles. Its deliveries were 15 percent less than forecast and were even lower than the first quarter of this year, and managed to sell only 14,370 cars, down from the 17,000 it expected to sell, according to a July letter sent to shareholders.

Analysts warn it could be years before Tesla finds its real market value.

“There’s no doubt Tesla will remain the category leader as electric vehicles become increasingly mainstream, but it could be years before the bottom line justifies any investment in Tesla other than a purely speculative one,” James Brumley, InvestorPlace.com analyst, told reporters Thursday.

Another analyst group argues Musk’s business model is complicating the company’s Model 3 production, as well as the company’s bottom line.

Devonshire Research Group, a technology investment firm, warned earlier this year that Tesla, because of the exotic tools it uses to hide its financial stability, is “operationally vulnerable to setbacks.”

The group calculated that there is an 80 percent probability that Tesla’s Model 3, and the company’s future financial strength, will tumble as a result of what Devonshire says is its Ponzi scheme business operation.

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