Elon Musk's apology to analysts he scorned sends Tesla stock soaring

Elon Musk's apology to analysts he scorned sends Tesla stock soaring

Tesla is already eyeing future Model 3 production milestones, expecting to hit 6,000 vehicles per week by the end of this month, followed by even more "over the next few quarters". The stock climbed about 4 percent in after-hours trading.

Several analysts had predicted a widening loss for Tesla.

But on Wednesday, a contrite Mr Musk apologised to both and said he was exhausted from working more than 110 hours per week last quarter. Now the big question is, What will happen if the company doesn't reach profitability next quarter?

Tesla recently laid off about 9% of its staff. Musk explained in June that the job cuts were part of a restructuring plan to eliminate "duplication of roles" and added that the layoffs should reduce costs and help the firm on its path to profitability.

"It took 15 years to execute on our initial goal to produce an affordable, long-range electric vehicle that can also be highly profitable", Musk and the chief financial officer, Deepak Ahuja, wrote in the shareholder letter.

In its eight years as a public company Tesla has turned a profit in only two quarters. There's "no excuse for bad manners", Musk said.

Tesla is America's youngest major automaker and has at times been valued more than General Motors and the other Detroit auto giants it has pledged to distrupt. Musk has insisted the company won't need to raise more capital this year, a view Wall Street has doubted after the company repeatedly pushed back manufacturing targets for its new Model 3. The Model 3 was originally hailed as affordable at $35,000, but Tesla is only selling higher-end versions of the auto at the moment.

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Tesla stock climbed as much as 5.7 per cent to US$317.95 as of 5 p.m.in NY.

However, CEO Elon Musk promised net profit in the second half of the year as production of the Model 3 ramps up.

Once the report came out and Tesla's stock began to rise, Musk returned to Twitter, not to discuss financials but to encourage video-game developers to apply to the company.

The company said it maintained its level of production, producing 5,000 Model 3s in a week multiple times in July. The company also manufactured an additional 2,000 Model S and Model X vehicles per week. Tesla cars with autopilot installed and activated can make the console look like "Mario Kart's" rainbow road track and play the actual cowbell audio from Saturday Night Live over the stereo.

Musk said it will cost the same amount as systems Tesla now puts in its cars, but will bring much more processing power.

"At 7,000 cars a week, we believe we can be sustainably profitable", he said.

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