Elon Musk says sorry, starts acting like a real CEO

Virginia Carson
August 2, 2018

Chief executive officer Elon Musk pledged to post net profits in future quarters and on a conference call on Wednesday apologised to two analysts he cut off on the company's first-quarter call.

The company would use money generated from sales to fund big projects such as the $2bn (£1.5bn) new factory in China and another plant in Europe, he said.

But on Wednesday, Musk apologised to both and said he was exhausted from working more than 110 hours per week last quarter. Then, Musk told an analyst the company would start paying off its debts.

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But the company has a track record of missing its goals, and there remain big questions around Tesla's ability to scale production and compete with electric cars from other vehicle manufacturers. This quarter, Tesla hit its 5,000-car-per-week production goal "multiple times" in July-meaning it's not hitting this rate consistently.

"We like the more muted tone of the company's outlook, with the absence of unnecessary new stretch goals", said CFRA analyst Efraim Levy. Tesla says it's on track to produce 100,000 Model S and X cars this year. After struggling mightily to mass-manufacture a auto for the first time, the company is gaining momentum with the Model 3 sedan that's critical to its bid to start making money.

Adjusted for stock-based compensation, the company lost $3.06 per share. That's substantially less than the 2017 level of $US3.4 billion. Tesla said its capital expenses would be slightly below $2.5 billion in 2018, less than last year's $3.4 billion. He has run into trouble for snubbing Wall Street analysts to disparaging journalists critical of the company, and also for recently abusing a British caver who helped rescue 12 boys from a flooded Thailand cave.

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Excluding items, Tesla reported a loss of $2.45 per share, compared with expectations of a loss of $2.92.

Tesla's upcoming Version 9 software is expected to include several key improvements to the company's Autopilot driver-assist system.

Tesla has begun to lay off 9 percent of its workforce as it tightens spending. The company has never turned an annual profit and has had only two profitable quarters since becoming public in 2010.

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While Musk flaunted plans to get Tesla's fiscal house in order, he also might end up raising some capital after all.

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