cash burn in the second quarter slowed from about $1.1 billion. We believe its because the company has scaled down its level of ambitions for expensive and exotic automation production-aids.
Had it delivered the vehicle in June, the subsidy would have lapsed a quarter earlier, a strategic move applauded by Ross Gerber, chief executive of Gerber Kawasaki Wealth and Investment Management, which holds Tesla shares.
According to the report, gross margins of the Model 3 turned 'slightly positive, ' and Tesla approximates a significant growth of 15 and 20 percent in Q3 and Q4 respectively.
"I'm super happy", said Ross Gerber, CEO of Gerber Kawasaki Wealth & Investment Management and one of Tesla's most outspoken bulls. The stock was down about 3.4% year-to-date as of Wednesday's close. Analysts have suggested that Tesla will need to raise cash to support the Model 3 and other vehicles in the company's pipeline, but Musk reiterated Wednesday that it won't need to seek additional funds.
Tesla said Wednesday that it had burnt less cash than expected during the second quarter and was nearing profitability, a long-doubted goal for the beleaguered automaker racing to boost production of its all-electric cars.
During the second quarter, Tesla laid off 9 per cent of its workforce as it worked toward Mr Musk's promise of making money. He added that Tesla's expansion plans in China would be financed by "essentially a loan from local banks in China".
Tesla is continuing its elusive search for overall profitability, as it reported a loss of USD 743 million for the Q2 - marginally lower compared to losses of USD 770 million and USD 785 million in the previous two quarters.
Total revenue rose to US$4 billion from US$2.79 billion. That was more than 11 percent above the closing price for the trading day, but still below the $370 peak that was recorded in June.