Tesla burns $739.5M on way to record 2Q loss

Electric car maker Tesla Inc. burned through $739.5 million in cash in the last quarter, paving the way to a company record $717.5 million net loss as it cranked out more electric cars.

But the company reiterated a promise from CEO Elon Musk to post net profits in the third and fourth quarters, and Telsa’s shares rose 5.3 percent to $316.85 in after-hours trading.

The Palo Alto, California, company said it lost $4.22 per share from April through June as revenue grew 43 percent to just over $4 billion. Adjusted for stock-based compensation, the company lost $3.06 per share. That was worse than Wall Street estimates. Analysts polled by FactSet expected a $2.88 loss per share.

The net loss more than doubled from the same quarter a year ago.

In a statement released after the markets closed Wednesday, Tesla said it expects to produce 50,000 to 55,000 Model 3s in the third quarter, an increase of at least 75 percent from the first quarter. Tesla spent millions as it reached a goal of producing 5,000 Model 3 sedans per week by the end of June. Cash from selling the Model 3, which starts at $35,000, is key to holding off more borrowing and turning a profit.

The company said it expects to grow at a rapid pace and it should achieve sustained quarterly profits barring an unforeseen event.

The company said it has cut back on capital spending by changing its strategy to produce the Model 3 on existing assembly lines rather than adding lines. Tesla projected total 2018 capital spending at just below $2.5 billion. That’s substantially less than the 2017 level of $3.4 billion.