Following Wednesday’s report of a $408 million loss in the second quarter and the news of its longtime Chief Technology Officer JB Straubel leaving the company, Tesla stocks dropped by 11%.
According to the latest filing with the Securities and Exchange Commission, the Silicon Valley carmaker experienced a loss of $408 million in the period between April and June, despite delivering a record number of cars during that time.
Tesla also announced JB Straubel, who had helped Elon Musk launch the company and who had been acting as the CTO for the past 16 years is stepping down. “I’d like to thank JB for his fundamental role in creating and enabling Tesla,” CEO Elon Musk said on a call with analysts Wednesday evening. “If we hadn’t had lunch in 2003, Tesla wouldn’t exist, basically.”
The electric car manufacturer reported a second-quarter adjusted loss of $1.12 per share, exceeding analysts’ predictions of an adjusted loss of 35 cents a share. However, this is an improvement compared to June 2018, when Tesla had reported a loss of $3.06 per share.
Hours after the Tesla Second Quarter 2019 Update was published, the car company stocks went down by 11%, matching the gains the stock made earlier this month after a strong second-quarter vehicle deliveries report.
Tesla delivered 95,356 vehicles and produced another 87,048 in the quarter ending on June 2019, surpassing its previous quarterly records of ~91,000 deliveries and ~86,600 units built in the final quarter of 2018.
This quarter’s record number of vehicles delivered was driven principally by increased sales of Model 3 compact car, which was the best-selling electric car in the world in 2018. Its popularity allowed Tesla to make record back-to-back profits for the first time in the company’s history.
In a letter to shareholders, CEO Elon Musk repeated previous guidance that Tesla would deliver a total of 360,000 to 400,000 vehicles this year. Even though that projection seemed far fetched after the Q1 reports when Tesla achieved only 63,000 vehicle deliveries, Musk remains determined to achieve this aim.
“We are working to increase our deliveries sequentially and annually, with some expected fluctuations from seasonality,” Musk said in the letter. “This is consistent with our previous guidance of 360,000 to 400,000 vehicle deliveries this year.”
To attain the ambitious goal of delivering a minimum of 360,000 vehicles by the end of 2019, Tesla will have to keep output on records levels in the following two quarters. In the first half of the year, the electric car producer made more than 158,000 vehicle deliveries.
The shareholder letter also informed of the progress on Tesla’s next vehicle, the Model Y. After wavering between producing the compact SUV in Nevada or California, the decision had been made to manufacture it in California. The production began last quarter. Tesla is also making progress on launching a Gigafactory in Shanghai, China by the end of the year.
“We remain on track to launch local production of the Model 3 in China by the end of the year and Model Y in Fremont by fall of 2020. We are also accelerating our European Gigafactory efforts and are hoping to finalize a location choice in the coming quarters,” Musk wrote in a letter to shareholders.