Tesla burns $739.5 million in cash on way to record Q2 loss

2017 Tesla Model X

Despite Tesla reporting a record loss that doubled to $718 million (546.88 million pounds) in the second quarter, shares jumped as much as 11 percent in after-hours trading, as investors focused on steadier production volumes and a slower rate of cash burn. Analysts polled by Bloomberg expect the company to report an adjusted loss of $2.90 per share on revenues of $2.974 billion. Capital expenditure is expected to fall $900m to about $2.5bn this year and Tesla had $2.2bn in cash and equivalents.

Several analysts had predicted a widening loss for Tesla.

"TSLA is accommodating Model 3 customers who are willing to pay for premium features - making the vehicle more of a luxury item with a smaller addressable market than the mass market auto TSLA had promised".

"Going forward, we believe Tesla can achieve sustained quarterly profits, absent a severe force majeure or economic downturn, while continuing to grow at a rapid pace", the company said.

Elon Musk, 47, the billionaire technology entrepreneur who founded Tesla, believes the Model 3 will spark an electric vehicle revolution.

Notably, Tesla in its shareholder letter writes that it has been able to maintain a Model 3 production rate of 5,000 units per week. The company is targeting 10,000 Model 3 cars weekly, which it anticipates reaching next year.

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Tesla has been spending heavily as it strives to get the Model 3 - its latest auto - into the hands of customers.

Today the CEO apologized not once, but twice to the same analysts on the call. After losing nearly 20 percent of its value after the previous earnings call, Tesla stock bounced about 5 percent in after hours trading immediately after the latest earnings report was released.

The latest report is somewhat more optimistic on that front, showing a significant bounce in revenues from Model 3 production, up from $3.4 billion in the first quarter to just over $4 billion in the last quarter.

The company cut its spending forecasts last quarter and Tesla has begun to lay off 9 per cent of its workforce.

Einhorn, a short seller who had bet against Tesla's stock, also said he would not renew his own lease on a Model S, blaming touchscreen and window problems. The company has never turned an annual profit and has had only two profitable quarters since becoming public in 2010.

On Twitter, Elon Musk asked for developers to consider joining Tesla to make games optimized for its vehicles.

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