Tesla Shares Fall After Wider Than Expected First Quarter Loss

Chris White | Energy Reporter

Tesla’s eye-popping valuation took a hit after the company reported higher than expected first-quarter losses Wednesday night.

The electric automaker’s per-share loss of $1.33 was steeper than the 81-cent-a-share loss analysts expected. Tesla reported an adjusted per-share loss of $1.46 during last year’s first quarter filing.

Tesla reported a loss of $330.3 million, or $2.04 a share attributable to common stockholders, compared with a loss of $283 million, or $2.13 a share, in the previous year’s first quarter.

Tesla saw its capitalization surge dramatically last month to about $50 billion, $3.1 billion more than Ford the second largest auto company behind GM. CEO Elon Musk bragged about the accomplishment at the time on Twitter and mocked those who shorted the company.

Musk, who owns 20 percent of the company, promised to deliver nearly 500,000 Model 3s to the market by 2018 despite Tesla’s paltry showing last year. He must produce more than 40,000 Model 3s a month to keep that promise. Tesla managed to produce only 25,000 cars during the first three months of this year.

Various media outlets and analysts believe the financial losses are not as important as the company’s ability to mass produce the Model 3, a vehicle that Musk said is on track to be delivered on schedule.

Some analysts are not as optimistic.

Cowen analyst Jeff Osborne, for instance, said in a note published Monday that he sees “likely ramp delays” on the Model 3. Musk’s California-based company has demonstrated an inability to meet delivery quotas.

“As Tesla’s Model 3 ramp proceeds, we continue to have more questions than answers,” he wrote, adding that the company’s primary factory has recently received several of the machines it will need to begin mass producing the Model 3.

UBS analyst Colin Langan said Tuesday that he remains “cautious on the launch timing given TSLA’s history of delays.” The company is unlikely to sell its Model 3 profitably at this stage of the game, he claimed.

“At our estimate of $155/kWh battery pack cost in 2025, the Model 3 will still cost about $7,000 more to build than an equivalent ICE vehicle,” Langan added.

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