Tesla posts record $710m net loss as Model 3 struggles continue

Electric car company Tesla lost a record $709.6m in the first quarter of 2018, as it struggles to produce its mass-market electric car, the Model 3.

The loss was announced on Wednesday, alongside news that the company had also spent $745.3m in cash over the same period. However, revenues did rise by 26% from last year, to $3.4bn.

In a conference call with analysts, Tesla CEO Elon Musk admitted the criticism was valid but said the company would have positive cash flow in the third quarter of this year.

“It’s high time we became profitable,” said Musk. “The truth is you’re not a real company until you are, frankly. That’s our focus right now.”

The Model 3, Tesla’s first mass-market vehicle, attracted more than 500,000 potential buyers on a waiting list, with many of them paying $1000 in deposits. But, the company has struggled to produce the cars at the volume required. In December, Musk promised to build 20,000 vehicles, but the company managed only 2,425 in total during the last three months of 2018.

He has recently admitted that company rushed into automation too soon, which was causing some of the production delays. “Humans are underrated,” he said in a tweet.

Tesla shares dropped at the news, particularly after a testy call with analysts where Musk cut off “dry” queries, and took a string of questions from the host of a YouTube channel.