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Tesla Reports Another Big Loss, but Sees Only Profit Ahead

Tesla Reports Another Big Loss, but Sees Only Profit Ahead

Tesla recorded another huge loss last quarter and burned through hundreds of millions of dollars in cash as it ramped up production of its first mass-market model.But the electric-car maker intends for that loss to be its last.Tesla is about to turn the corner, Elon Musk, the chief executive, told analysts and investors on Wednesday…


Tesla recorded another huge loss last quarter and burned through hundreds of millions of dollars in cash as it ramped up production of its first mass-market model.

But the electric-car maker intends for that loss to be its last.

Tesla is about to turn the corner, Elon Musk, the chief executive, told analysts and investors on Wednesday during a conference call after the company announced its quarterly results.

“Our goal is to be profitable and cash-flow positive for every quarter going forward,” Mr. Musk said. Outside of a recession or major economic shock, the company is confident that it can reach that target, he said.

Investors liked the promise. Tesla’s stock rose about 9 percent in extended trading, after closing at $300.84.

producing 5,000 Model 3s in a week — the benchmark it has said it needed to reach to become profitable. In July, it maintained that production pace “multiple times,” the company said Wednesday.

The output it anticipates in the third quarter — 7,000 vehicles per week across its entire fleet, or 350,000 per year — “should enable Tesla to become sustainably profitable for the first time in our history,” the company said in a note to investors.

That would be a significant accomplishment for a company that has never reported an annual profit — its latest quarterly loss was $743 million on $4 billion in revenue — and some analysts remain skeptical. The goal is plausible but could easily be derailed by production glitches, delivery delays and softer-than-expected demand for the Model 3, said Brian Johnson, an analyst at Barclays.

laid off 3,500 employees, around 9 percent of its work force, to reduce its operating costs. It recently made the unusual move of asking some suppliers for price reductions on work already underway.

The amount that Tesla owed its suppliers ballooned in the second quarter, which may have helped the company conserve cash. Its accounts payable, the balance-sheet item for yet-to-be-paid bills, totaled $3 billion at the end of the second quarter, an increase of more than $425 million from the first quarter.

But its big bets keep growing. Last month, Tesla announced plans for a vast new plant in China, its first outside the United States, that it hopes will eventually make 500,000 vehicles a year.

“boring, bone-headed questions.” He apologized Wednesday for his earlier remarks.

“There’s really no excuse for bad manners,” he said. “There are reasons for it. I’ve gotten no sleep and been working sort of 110-hour, 120-hour weeks. But nonetheless, there’s still no excuse. “

Mr. Musk also apologized for rambling at times on Wednesday’s call.

“Sorry if I sound a little tired,” he said. “I’ve been working like crazy in the body shop lately.”

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