Tesla lost $702 million in the first quarter of 2019, the fourth-worst quarterly loss for the company since it became publicly traded in 2010.
The loss comes after posting two consecutive profitable quarters to close out 2018.
Tesla Chief Executive Elon Musk warned Tesla watchers on a February press call that he expected the company’s quarterly earnings released Wednesday to miss projections. Revenue reached $4.5 billion, compared with $3.4 billion a year ago. But, it was down from $7.2 billion in the previous quarter. Wall Street was expecting revenue of about $5.779 billion.
Tesla expects another loss next quarter and a return to profitability in Q3, as the impact of higher deliveries and cost reduction take full effect, a letter to shareholders said.
Tesla said it produced roughly 63,000 Model 3 vehicles in Q1, which was approximately 3% more than the previous quarter. The company said “modest” changes to production rate where due to changes in process for the introduction of new variants of Model 3, fewer working days and a supplier limitation.
“Model 3 was yet again the best-selling premium car in the US in Q1, outselling the runner-up by almost 60%,” the update said.
The first overseas deliveries of the Model 3 began in Q1. Tesla explained that to meet international demand, Europe and China Model 3 builds occurred in the first half of the quarter, with builds for local U.S. markets in the second half.
Tesla said a wave of quarter-end deliveries in the US, China and Europe meant that even short delays caused deliveries to be deferred to Q2. “To improve our operations, cost efficiency and customer experience, we are in the process of balancing our regional vehicle builds throughout the quarter.”
Deliveries of Model S and Model X declined to 12,100 vehicles in Q1 after a two-year run rate of roughly 25,000 units per quarter.
“This decline was mainly caused by weaker Q1 demand due to seasonality, pull-forward of sales into Q4 2018 in the U.S. due to the first scheduled reduction of the federal EV tax credit in Q1 and discontinuation of our 75 kWh battery pack,” Tesla said.
Tesla had $2.2 billion in cash at the end of the quarter, $1.5 billion less than at the end of 2018, after a $920 convertible-bond payment and an increase in the number of vehicles in transit to customers at the end of the first quarter, the company said.
The the full report here.