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Tesla Posts Massive $702 Million Loss Last Quarter

The SEC said funding has not been secured, and has accused Musk of misleading investors

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Tesla CEO Elon musk, board
Tesla CEO Elon Musk. (VOA)

Tesla announced that it has lost $702 million in the last quarter, while the Elon Musk-owned electric car company’s revenue was also down 37 per cent compared to the previous quarter, the media reported.

In its announcement on Wednesday, the company said it expected its sales figures to look much better next quarter, adding that it encountered “many challenges” ramping up deliveries of the vehicles abroad, but confirmed those issues should be smoothed over soon and a major sales bump could be on the way, CNN reported.

Musk said during a conference call with investors on Wednesday that the last quarter may have been rough, but Tesla has a rosy outlook. Demand for all three of Tesla’s electric vehicle models is strong, he said.

“We also have a lot of markets (abroad) where we haven’t yet tapped into demand, especially the Model 3,” the billionaire businessman said.

Tesla revealed earlier this month that it delivered about 63,000 vehicles to customers in the first three months of 2019 – a 31 per cent drop compared to the prior quarter, and the single largest decline Tesla has ever reported.

Slowing sales are bad news for Tesla because the company needs cash in order to pay down its sizable debts, according to analysts.

tesla
A Telsa car recharges at a Tesla charging station in Charlotte, N.C.. VOA

Tesla said it ended last quarter with $2.2 billion of cash on hand, which the company had earlier described as “sufficient”.

Company stocks dipped slightly after earnings were released, but later edged back to even.

It had posted back-to-back profits in the previous two quarters. Last quarter, for example, Tesla recorded a profit of $139 million on sales of $7.2 billion.

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Meanwhile, Musk has been in a standoff with the US Securities and Exchange Commission ever since he tweeted that he was “considering” taking the automotive company private last year, and that he had secured funding.

The SEC said funding has not been secured, and has accused Musk of misleading investors. (IANS)

Next Story

Ashok Leyland Ready to Ride on Elon Musk’s India Dream

Tesla was expected to enter India with the Model 3 that sells for nearly $35,000

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Elon Musk, CEO of SpaceX. Wikimedia
By Nishant Arora
Tesla CEO Elon Musk who has been moving back and forth on his India dream for couple of years and unable to take the next big step now has an invitation from commercial vehicles major Ashok Leyland.
Musk wants to make India his next big market but the question lingers: Will the electric car ever run on the bumpy ‘desi’ roads?
According to Venkatesh Natarajan, Senior Vice President and Chief Digital Officer, Ashok Leyland, the company is open to Musk for a partnership to finally let Indians experience his path-breaking autonomous Tesla electric cars.
“We are open to Musk’s offer. I truly believe that it’s not just one partner who can contribute to the electric car dream in India. There are multiple agencies who will be involved in this.
“We will be lucky to be part of that consortium,” Natarajan told IANS on the sidelines of the just-concluded AWS India Summit here in the financial capital.
“I go back to the organisation’s philosophy and culture. Whenever we see new technology, we like to try it out, just like a small kid who sees a new toy and wants to experiment. We are open in terms of technology adoption — anything that adds value to our customers,” Natarajan noted.
The company, flagship of the Hinduja Group, reported a revenue of Rs 6,325 crore in Q3 (FY 2018-19). Year-to-Date (YTD) revenues touched Rs 20,209 crore, up 15 per cent over corresponding period last year.
Rating agency ICRA recently upgraded the long-term rating of fund-based limits of Ashok Leyland to AA+ from AA with stable outlook. The agency believes that Ashok Leyland’s financial profile will remain healthy supported by stable demand outlook for the medium and heavy commercial vehicle (M&HCV) segment and light commercial vehicle (LCV) segments.
Tesla CEO Elon musk, board
Tesla CEO Elon Musk. (VOA)
Touted as India’s largest bus manufacturer and the fourth largest in the world, the company reported 10 per cent rise in the domestic vehicles sales at 13,141 units in April 2019. The commercial vehicles company had sold 11,951 vehicles in domestic market during the same month last year.
“Ultimately, we need more money. We are in the business of making money. As long as we are able to make more money and help our customers generate more money, we are game to every new technology,” Natarajan emphasised.
Ashok Leyland’s offer must be a sweet news to Musk’s ears. Breaking his silence over India plans after 10 months, Musk tweeted in March that he would love to be in India in 2019 or next year.
“Would love to be there this year. If not, definitely next! India,” Musk tweeted to a user.
Musk earlier blamed the Indian government’s policies for giving up on his India dreams. He also blamed the FDI norms for the delay in the electric car maker’s entry into the Indian market.
“Would love to be in India. Some challenging government regulations, unfortunately,” Musk tweeted in response to a Twitter user who wrote “No Tesla in India” on his Twitter handle.
Earlier this year, Tesla’s Indian-origin Chief Financial Officer Deepak Ahuja announced his retirement from the firm, bringing Musk’s India dream to a halt again.
Tesla was expected to enter India with the Model 3 that sells for nearly $35,000.
In 2015, Prime Minister Narendra Modi visited Tesla headquarters at Palo Alto, California and met Musk who gave Modi a tour of the company’s electric car plant.
In January this year, Musk laid the foundation of Tesla Gigafactory in Shanghai — the first-ever outside the US — that is expected to produce 500,000 electric vehicles per year and double the production capacity. (IANS)