Elon Musk and his family announced on Wednesday that Tesla has recorded a significant loss of revenue in the first quarter of this year. The loss of the total value of 702 million dollars will be due to the fall in the sale of electric cars of the brand, a situation that CEO Elon Mask predicted earlier this year. This is a report by the New York Times (NYT) about a very significant drop in revenue compared to the profit in the second half of last year, ie a 40% drop in available liquidity at this time.
The company said it had faced logistical difficulties, mainly in terms of the delivery of electric vehicles from Model 3 to other countries, such as Europe and China. In the home country of the brand, the reduced Tesla buyers' credit can be measured on the sale of Model 3 in the United States. According to the NYT report, Tesla had $ 2.2 billion in cash by the end of the first quarter, down 40% from the end of last year. The company spent $ 920 million on the return of the bond in March. Tesla's operations spent $ 640 million in cash in the first quarter.
Basically, the situation means that the company sold less than 31% of vehicles in the fourth quarter of 2018. There were also problems with its solar activities, where sales fell by more than 35% over the same period. in the first quarter of 2019. We expected bad results, but Tesla's revenue and revenue losses are unbelievable. Revenues have been weakened, but the cost of the obvious strategic mistakes has spilled a lot of money, "says Vicky Bryan, chief executive officer of the Bond England research firm, in e-mail.
However, the problem does not remain solely on its model 3. The demand for high-end vehicles Tesla, Model S and Model X also declined by 56% in the first quarter compared to the fourth quarter of the year. last year, while the company lowered the price of cars at the end of February. Indeed, Tesla said on Wednesday that a reduced tax credit could weaken demand for the X and S. models. The company added that at lower prices, the rise in high-end versions of these models exceeded the supply offered. Tesla also hopes that buyers will turn to new versions of the S and X models that can work with full load. But why lower the price of vehicles if demand is so strong?
The NYT reports that in an investor call after the announcement of the results, a stock market analyst asked why Tesla cuts prices if the demand for its products is strong. In response, Tesla's CEO Elon Mask said the goal is to make his cars as accessible as possible. He also added that at the moment, he will not be opposed to a campaign to raise money to revive things from the current quarter to the end of the year. According to NYT, Elon Musk, who previously said the company does not need more capital, said he changed his mind because Tesla could now use more efficiently. The idea of fundraising is interesting at this stage, analysts said.
This loss, published by Tesla, is reminiscent of what Uber will see in the second quarter of the previous year. Indeed, in August 2018, Uber reported a loss of $ 891 million in the second quarter of 2018. Although these results were an improvement of 16% compared to the same period in 2017, the loss followed one of the few revenues observed by the company in the first quarter of 2018 mainly through the sale of foreign assets. According to Bloomberg, the CEO spends large quantities, whose quantities are kept secret in several other activities, such as food and logistics delivery. As a result of these unproductive investments in the branch of autonomous driving and slowing of growth, Uber's investors wanted to sell self-employment.
That said, Tesla's supporters expect that the sale of the Model 3 will increase and help the company achieve its goal of providing 360,000.4 million vehicles this year. According to NYT, Tesla said on Wednesday that the goal is, but that its production of vehicles will be significantly higher than supplies, due to the time needed to transport cars from California to other countries.
Source: Tesla Q1
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