Published: Thu, May 03, 2018
Money | By Hannah Jacobs

Tesla shares slide as Musk calls analyst 'boring bonehead'

Tesla shares slide as Musk calls analyst 'boring bonehead'

Sanford C. Bernstein analyst Toni Sacconaghi, who had asked the question Musk had branded "boring", said the call was "a unique experience, to say the least". And by Thursday, Musk's refusal to answer questions about the possibility that Tesla will need to raise more capital only added to investors' and analysts' concerns about that subject.

Net reservations for the Model 3, including configured orders that had not yet been delivered, exceeded 450,000 at the end of the quarter, Tesla said.

In one of the most weird earnings calls we have ever heard, Tesla refused to address analyst questions on capex, cash burn and other "boring bonehead questions" while providing commentary on "barnacle" like third-party contractors and anecdotes on an ineffectual "flufferbot". "Prior to a planned shutdown in mid-April to further increase production, we produced more than 2,000 Model 3 vehicles for three straight weeks, and we hit 2,270 in the last of those weeks", Chief Executive Officer Elon Musk said in a statement.

The company expects to be making 5,000 Model 3's per week by the end of June.

Tesla shares swerved slightly higher at first then fell by about 1% to $298 in after-market trades that followed release of the earnings figures. That's Tesla's first mass market vehicle with a starting sticker price of $35,000, and its success is considered key to the company's business model.


Tesla gave the update on the Model 3 as part of its first-quarter earnings report, which came out after the close of trading Wednesday.

Over the next 20 minutes, Musk took a dozen questions from Gali Russell, a Tesla enthusiast and owner of the HyperChange TV YouTube channel.

The company said it will reduce capital spending for 2018 from $3.4 billion to $3 billion.

The California-based firm said that it made "significant progress" in ramping up production Model 3 vehicles considered key to its success in the mass market. Sorry, these questions are so dry. "Boring questions are not cool", said Musk. Excluding one-time items, Tesla lost $3.35 a share, while Wall Street analysts had forecast Tesla to lose $3.58 a share, on $3.22 billion in revenue.

"We believe that Tesla is essentially learning how to become a manufacturing company on the fly", said Spak.


Products built at the Gigafactory include the drive unit and battery packs for Model 3 sedans and the stationary Powerwalls and Powerpacks, which are used for energy storage for homes, businesses and utilities.

Tesla has predicted high sales and strong cash flow in the third quarter. The business's quarterly revenue was up 26.4% compared to the same quarter past year. Tesla also shut down its Model 3 production for a few days in April to correct some assembly-line issues with the vehicle.

"A really great production system is primarily a software problem, and there's no one in the auto industry that is remotely as good as Tesla at software", he said.

One example: Musk said Tesla had a very complex robot created to put fiberglass mats on top of the Model 3's battery packs.


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