Despite increasing its revenue, Tesla posted a record quarterly loss of almost $710m (£523m) for the three months to March – more than double the same period last year.
Revenues jumped 26 percent to $3.4bn, but the automobile company, led by Elon Musk, continues to spend.
Tesla said it would cut capital spending this year to less than $3bn as it focuses on “near-term needs.”
It is planning to begin production of its next model, Y, by November 2019 despite missed production deadlines for Model 3. According to Reuters, the company has issued a request to suppliers to start competitive bidding for its Model Y production. The 2019 deadline would be “aggressive, but possible,” a source told the newsagency.
The competitive process is a first step in the making of a new car, and usually takes place around two years before production.
This move from Tesla comes after its fortunes took a hit over the Easter weekend. Tesla founder Elon Musk tweeted a series of jokes, including a picture of him seemingly passed out against a Tesla car and holding a cardboard that read ‘Bankwupt!’
The electric automaker’s stock price (NASDAQ: TSLA) fell just over 5 percent when markets reopened on April 2, with investors worried about the company’s finances and production capabilities. The company’s stock price has dropped by more than a quarter over the past three weeks, according to a WikiTribune analysis.
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Investors are worried the company won’t be able to deliver on the production of the Model 3, its first mass-market car (CNN). Although the expected quantity of Model 3s for the first quarter has been missed – 2,020 against the 2,500 expected – the vehicle is officially the best-selling electric car in the US (Electrek). Electrek also reports that the Model S and Model X are likely to take second and third positions respectively. Experts say the carmaker needs to raise between $2-3 billion (£1.8bn) this year to finance the production of its newest model. “This is a company about growth, and growth needs financing,” said Hitin Anand (Bloomberg), an analyst at CreditSights, an independent investment research provider.
Credit rating agency Moody’s downgraded Tesla last week because of its repeated failures to meet production milestones. This will make it more expensive for the company to raise money. Tesla also has approximately $1.2 billion of debt maturing in the next 12 months (Bloomberg), from a total of $10 billion.
Additionally, the U.S. National Transportation Safety Board said on April 8 it was “unhappy” that Tesla had released investigative information about the fatal crash of one of its self-driving cars last month.
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Separately, CNN reported that Tesla will voluntarily recall about 123,000 Model S sedans due to problems with the luxury car’s power steering. As part of this global recall, Tesla will be recalling 8,898 vehicles in China, the country’s quality watchdog announced. Meanwhile, a class-action lawsuit against Musk and Tesla’s board of directors over the company’s acquisition of a solar panel company is also set to proceed after a judge in Delaware refused to dismiss it.