Tesla shares skid as it pushes pack profit target

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The electric car maker records a $408m second-quarter loss, meaning it is in the red by $1.1bn for the year so far.

Tesla shares have tumbled after it reported bigger than expected quarterly losses – despite record deliveries for its electric cars.

The company, led by Elon Musk, was in the red by $408m (£327m) for the three months to the end of June and pushed back its target for turning a profit to the end of this year.

It also revealed that J.B. Straubel, pioneer of Tesla’s electric batteries, was stepping down from his role as chief technology officer.

The shares fell 11.5% in after-hours trading on Wall Street.

Revenues rose by 59% to $6.3bn – though that was short of market expectations – and Tesla delivered a record 95,356 vehicles in the quarter.

However, that was behind the sales pace need to achieve Mr Musk’s goal of 360,000 to 400,000 deliveries this year.

Tesla’s quarterly loss was narrower than the $718m it reported in the same period a year ago, but larger than analysts had expected.

Profit margins were also squeezed.

The company is under pressure to become sustainably profitable and contain costs while still spending on major initiatives such as a factory in Shanghai and new models like the Model Y SUV and a commercial truck.

But it said in its quarterly results – published on Wednesday night – that it was focusing less on profit and more on volume growth.

Investing.com analyst Clement Thibault said Tesla’s update “will inevitably lead to more questions about its ability to stabilise and turn a profit”.

Tesla had managed a half-year in the black, with profits of $451m in the last six months of 2018, but 2019 has seen it return to the red with losses totalling $1.1bn for the first half.

Mr Musk told investors during a conference call that Tesla should be “around break even” in the current third quarter and that he was “pretty confident” it would turn a profit for the final three months of the year.

He also acknowledged that Tesla needed to make its models more affordable.

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