Tesla's second-quarter financials are out, and things are looking OK, but next quarter is when things will get truly interesting.
Tesla claimed automotive revenue of approximately $3.4 billion in Q2 2018, and when its energy offerings were lumped in, that figure was closer to $4 billion -- beating Thomson Reuters' forecast and setting another company record. However, the company did still lose money on the whole, working out to an adjusted loss of $3.06 per share, which is a bit worse than Thomson Reuters had estimated.
Compared with Q1, it's not too shabby, although its financials weren't exactly stellar then. Last quarter, the company reported about $3.4 billion in total revenue (automotive and energy combined) and a non-GAAP share loss of $3.35 per share. Tesla is still standing firm that it will produce a profit in both Q3 and Q4. At the time of writing, Tesla shares are up in after-hours trading after once again closing north of $300.
Model 3 production continues to ramp up, having finally hit the magic 5,000-Model-3s-per-week target in Q2. Tesla estimates that it will produce between 50,000 and 55,000 Model 3s in the third quarter, nearly double what it built this past quarter. In shorter-term milestones, Tesla hopes to hit 6,000 Model 3s per week by the end of August, increasing to 10,000 per week by the end of the year.
That ramp in production will also bring a net gain to the car's gross margin. Tesla said in its shareholder letter that the Model 3's gross margin "turned slightly positive" in Q2, and the boost in production could move that figure up to 15 percent by quarter's end. Its overall automotive margins increased to 20.6 percent GAAP (21.0 percent non-GAAP), thanks in part to the Model S and Model X. While these two cars didn't raise their average selling prices, Tesla found ways to reduce material and manufacturing costs.
Tesla may have lost money this quarter, but it's still got a fair bit of it. The company claims $2.2 billion in cash at the end of the second quarter, and it expects that figure to grow in Q3.
So what does that all mean for the layperson? Not that much. Tesla losing money in a quarter is hardly news, but it can be seen as a good sign that it made more money and burned less cash than analysts had hoped. If the company can hold to its lofty promises of ramping up Model 3 production, and if it does indeed turn a profit and improve margins, Tesla's balance sheet might soon resemble that of a real automaker.