Tesla Motors stock falls on wider loss, CEO Elon Musk comments on cash need

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Updated: August 6, 2015 9:00:37 AM

Shares of Tesla Motors Inc fell about 6 percent on Wednesday after the electric car maker posted a wider quarterly loss and said it may raise more cash to offset heavy spending on expanded production.

Shares of Tesla Motors Inc  fell about 6 percent on Wednesday after the electric car maker posted a wider quarterly loss and said it may raise more cash to offset heavy spending on expanded production.

A recently negotiated credit line can be extended from $500 million to $750 million and should be enough to cover planned investments in California and Nevada factories, Chief Financial Officer Deepak Ahuja told analysts on a conference call.

But “there may be some value” in raising additional funds for “risk reduction,” Chief Executive Elon Musk added. He declined to elaborate.

Tesla may not be cash-flow positive until early 2016, Ahuja said. Musk’s previous estimate was the end of this year.

Tesla’s new storage battery business could generate revenue of $400 million to $500 million in 2016, and “a few billion dollars” in 2017, Musk said on Wednesday.

Tesla lowered its full-year sales forecast to a range of 50,000 to 55,000 cars. Last year, Musk had forecast sales of 60,000 cars in 2015, but cut that earlier this year to 55,000. He forecast vehicle sales next year of 83,000 to 93,000.

Tesla’s stock fell to $254 in extended trading, after closing up 1.4 percent at $270.13. It has swung widely over the past 12 months, from a low of $181.40 to a high of $291.42.

The company said it lost $184.2 million in the second quarter, compared with a loss of $61.9 million in the year-ago period. Revenue climbed 24 percent to $955.0 million, from $769.3 million, as car sales continued to rise.

On an adjusted basis, Tesla said it lost 48 cents a share, less than the 60 cents analysts had expected. In the year-earlier period, Tesla said, it earned 13 cents a share on an adjusted basis.

With expenses still outstripping revenue, Tesla’s cash reserves fell to $1.15 billion as of June 30, from $1.5 billion on March 31 and $1.9 billion on Dec. 31, bringing total cash burn in the first half to $755.0 million.

Earlier this year, Ahuja said total cash burn for the year should be less than $1.0 billion.

Capital expenses totaled $405.2 million, as the company continued to spend to complete tooling on the crossover Model X and equip the new Nevada battery factory, which is slated to open in 2016. Spending in the first half totaled $831.2 million. Tesla said it expects full-year capital expenditures of about $1.5 billion.

Free cash flow fell slightly to $564.7 million. The cash burn in the second quarter was partially offset by $218.4 million in cash from financing activities.

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