Tesla's improves production but losses widen, Musk battles analysts

Electric car maker Tesla's first-quarter earnings beat analyst expectations thanks to record quarterly revenues, but continuing wide losses raised the prospect of another cash call.

Tesla reported higher revenue than expected at $3.4bn versus the $3.142bn predicted by analysts but net losses of $709.6m or $4.19 per share was more than double the loss of $2.04 per share reported in the same period last year.

Cash levels fell to $3.2bn by the end of March after the car-maker spent more than $1bn for the third time in four quarters, having sold $1.8bn worth of bonds last August.

Chief executive officer Elon Musk reiterated that he expected net income and positive cash flow in the following quarters. For that to happen, Tesla will have to achieve a production rate for its Model 3 car of 5,000 units per week, which it estimates it will reach by the end of the current quarter.

“There’s no question, there are ways we could have made the Model 3 production easier,” said Musk, on a conference call to discuss the company’s first-quarter results. “(But) we’ve had a radical improvement in tackling production. We’re feeling really good about the Tesla Model 3 production ramp.”

Tesla said the battery problems that had plagued production had been solved and the path to making 5,000 cars a week was looking a lot smoother. “A really great production system is primarily a software problem, and there’s no one in the auto industry that is remotely as good as Tesla at software,” Musk said. “Tesla is way better at software than any other car company.”

But during the post-results call with analysts and reporters, Musk appeared annoyed by some lines of questioning, even cutting off analysts after their "dry" and "boring bonehead" questions.

For the second quarter the company expects to shut down production for about 10 days to address bottlenecks. It also said it had lowered its capital expenditure expectations to $3bn below the 2017 total level of $3.4bn.