Elon Musk’s electric car company Tesla failed to meet expectations on first-quarter earnings as the demand for Tesla vehicles appeared to sharply drop. The company lost more than $700 million in the first three months of 2019.
CNBC reports that Tesla reported revenue for the first quarter of $4.54 billion, missing the expected projection of $5.19 billion. CNBC notes that this wider-than-expected loss appears to be due to a drop in demand for electric cars following the loss of a valuable tax credit for buyers on January 1.
Based on average estimates compiled by Refinitiv, here’s what Tesla reported versus what analysts expected:
- Loss per share on an adjusted basis: $2.90 versus 69 cents expected
- Revenue: $4.54 billion versus $5.19 billion expected
Tesla essentially lost $702.1 million of $4.10 per share during the first quarter which ended on March 31. During the same time frame last year, Tesla lost $709.6 million or $4.19 per share. Tesla shares were down by two percent at the time of the market close on Wednesday, trading remained flat after markets closed.
Tesla did appear to be aware that the company was going to face a tough first quarter, however, warning that income would be “negatively impacted” due to “lower than expected delivery volumes and several pricing adjustments.” Investors being prepared for the company’s poor performance may explain the flat trading following the market close.
Analysts expected Tesla to deliver around 76,000 cars during the quarter, instead, the company reported a delivery figure of 63,000 cars. Compared to a year ago, Tesla’s vehicle sales have risen by 36 percent to $3.72 billion compared to $2.74 billion last year. But this figure is down by 41 percent from the fourth quarter when Tesla generated $6.32 billion in automotive revenue.
Musk has attempted to blame the seasonality of the first quarter for the poor sales, claiming that people don’t like to buy cars in the winter time. On an earnings call, Musk stated that while capital has so far not been an issue for Tesla’s growth, “there’s merit to the idea of raising capital at this point.” The company could need it given the $920 million debt paid off with cash last month and the $180 million in debt that is due to be paid in April. Tesla has also closed stores and laid off employees in an attempt to lower costs.
Musk also stated that the company was still unsure about where produce it’s Model Y SUV but is leaning towards producing the cat the company’s Fremont, California, car plant. Tesla executives have, however, floated the idea of building the Model Y at the Reno, Nevada, Gigafactory.
Lucas Nolan is a reporter for Breitbart News covering issues of free speech and online censorship. Follow him on Twitter @LucasNolan or email him at lnolan@breitbart.com
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