Tesla has released its Q2 2018 earnings and financial reports. The company reported a loss of $717.5 million for the second quarter, nearly double from a loss of $336.4 million a year earlier. Total revenue rose to $4 billion from $2.79 billion.
Tesla ended the second quarter with $2.78 billion in cash after spending $610 million in capital expenses. Tesla has begun to lay off 9 percent of its workforce as it tightens spending. Tesla said its capital expenses would be slightly below $2.5 billion in 2018, less than last year’s $3.4 billion.
Tesla said that during July it had hit an earlier goal of building about 5,000 Model 3s per week “multiple times”, and reiterated a target of producing 6,000 per week by late August and to produce 50,000 to 55,000 of the sedans in the third quarter. In 2019, Tesla hopes to make up to 10,000 Model 3 per week.
Model 3 gross margins will rise to 15% in the third quarter and to 20% in the fourth quarter, Tesla said in the letter to shareholders.
“Having achieved our 5,000 per week milestone, we will now continue to increase that further, with our aim being to produce 6,000 Model 3 vehicles per week by late August,” Musk and Tesla CFO Deepak Ahuja said in a letter. “We then expect to increase production over the next few quarters beyond 6,000 per week, while keeping additional capex limited.”
Tesla also kept intact its target of delivering 100,000 Model S and Model X vehicles this year, and said capital expenditures will stay below $2.5 billion for the year, compared with $3.4 billion in 2017.
Tesla produced 53,339 vehicles in Q2 and delivered 22,319 Model S and Model X vehicles and 18,449 Model 3 vehicles, totaling 40,768 deliveries.
Tesla said demand for the Model 3 remained strong. It delivered its 200,000th electric car — including its more expensive Model S and X vehicles — in July, which means that US customers will have access to the full $7,500 federal tax credit until the end of 2018, at which point it will phase out over the course of 2019.
Tesla is currently producing more expensive versions of its Model 3 that start at about $49,000. It recently opened up reservations for the vehicle, allowing new buyers of the of the long-range battery version with the premium interior package to jump ahead of those who had ordered base models of the vehicle two years ago.
According to Tesla, the most commonly traded in models include the Honda Accord, Honda Civic, Toyota Prius, Nissan Leaf, and BMW 3 Series.
The company also outlined expansion plans, saying it would likely announce the location of a European factory this year and planned a Shanghai, China plant to produce both vehicles and batteries. Tesla’s China investment would not start “in any significant way” until 2019, with much of the roughly $2 billion cost to be funded via local debt.
During Q2, Tesla opened eight new store and service locations, resulting in 347 locations worldwide at the end of the quarter. It also opened 103 new Supercharger locations for a total of 1,308 Supercharger stations and in late June celebrated the 10,000th Supercharger stall opening. To date, Tesla has over 10,800 Superchargers and 19,200 Destination Charging connectors globally.