Margins went from nearly flat to 15 percent, still a ways off the 25 percent mark that CEO Elon Musk has called for.
The net loss more than doubled from the same quarter a year ago, and was slightly larger than the first quarter. Embattled CEO Elon Musk promised to plug the loss gap with a massive production increase. "It's good to be looking at the other end of this nightmare production ramp".
Last quarter, Musk mistreated two analysts by calling their queries about the company's cash needs and Model 3 orders "so dry" and "not cool".
But on Wednesday, a contrite Musk apologized to both and said he was exhausted from working more than 110 hours per week last quarter. "Hope you accept my apologies".
Tesla said Wednesday that its lone car-making factory in Fremont, Calif., had made 5,000 Model 3 sedans a week multiple times during July and should be able to continue at that rate through the third quarter. The company began to burn through money as it attempted to reach its production milestone of 5,000 Model 3's a week.
Tesla ended June with about $US2.2 billion in cash on its balance sheet.
"Our goal is to be profitable and cashflow positive in every quarter going forward", Musk said in the earnings call, allowing that there may be some quarters in which the company pays back debt, which could interrupt that trend. He also said that production efficiencies should rise as more Model 3s are built, and he said that he expects to make to around 750,000 vehicles in calendar year 2020.
In another boost, the automaker said it has trimmed its capital spending by manufacturing the Model 3 on existing assembly lines, rather than building new lines. That's substantially less than the 2017 level of $3.4 billion.
As it ramps up production of the Tesla Model 3, Tesla announced Wednesday that it reduced its financial losses in the second quarter-barely. But with low cash reserves, investors have anxious that Tesla would need to borrow more money to keep the company afloat.
During a conference call with analysts, Musk said late Wednesday he expects Tesla to report profits in all future quarters as long as the USA economy remains strong.
After quietly upgrading its semi-autonomous driving suite, Autopilot, almost a year ago, Tesla has been working hard on its next-generation hardware.
The company laid off nine percent of its workforce in the second quarter as it attempted to become profitable.
Peter Bannon, a former semiconductor architecture engineer at Apple turned leader in Tesla's Autopilot department, spoke during Tesla's quarterly earning call about the new hardware in the company's portfolio, Autopilot v3.
Tesla may also have more financing coming in soon, after all.