Tesla Motors Inc., the youngest publicly traded US automaker, has seen its stock plunge around 6 percent Wednesday when it announced its quarterly financial results, with the electric automaker posting increased losses.
Following the disappointing quarterly financial results, Tesla also opted to cut its full year sales guidance to a range of 50,000 to 55,000 units – last year it was mulling deliveries of 60,000 and earlier this year the target was already lowered to 55,000 autos. For 2016 the new expectations were of 83,000 to 93,000 vehicles. Because of the wider loss, the company announced it was mulling options to increase its cash to overcome the heavy investments into lifting production quota. According to chief financial officer Deepak Ahuja, who talked to analysts during the conference call, a newly negotiated credit line had the possibility of extension from $500 million to $750 million and the proceeds would offset the needed expenses in California and Nevada plants. Still, “there may be some value” in searching for even more funds for “risk reduction,” added chief executive officer Elon Musk, without elaborating further on the matter.
The CFO also predicted the company’s cash flow could turn positive at the earliest in 2016 after the previous forecast was for the year’s end. Musk added the new storage battery business should turn up with revenue of $400 million to $500 million next year and then “a few billion dollars” in 2017. While the carmaker’s revenue jumped 24 percent to 955 million dollars, thanks to increased auto sales, Tesla lost $184.2 million during the second quarter, more than it did during the same period of last year ($61.9 million). The stock dropped to $254 a share in extended trading and over the past 12 months it has varied massively – from as low as $181.40 to as high as $291.42.