Tesla flags promise of profit as Model 3 production steadies

Model 3					Tesla Model 3 Performance 0-60 mph put to the test in latest acceleration run

Shares of Tesla rose as much as 3.8% in after-hours trading Wednesday following the electric auto maker's second-quarter earnings report that showed a greater loss than what Wall Street had expected, on better-than-anticipated revenues. Shares of Tesla have risen 11% to $$332.99 in after-hours trading.

Tesla said it continued to produce 5,000 Model 3 cars per week in July (a figure it hopes to raise to 6,000 this month), along with 2,000 of its Model S and X vehicles. In 2017, the innovative tech company reported a net loss of (only) $336 million in the second quarter.

The Model 3 is Tesla's first auto that's aimed at a more mass-market audience, and it debuted to great fanfare, with thousands clamoring to put down $1,000 reservations for the vehicle.

Maybe Musk is exhausted after the huge effort Tesla has taken to ramp up its auto production - like adding a massive tent factory outside its vehicle plant in Fremont, California.

Tesla experienced "production hell" involving the Model 3, but has stabilized its production and finally saw positive gross margins.

Of course, the big metric investors care about when it comes to Tesla centers squarely on Model 3 production. The ultimate goal is to make 10,000 Model 3s per week by the end of the year. Embattled CEO Elon Musk promised to plug the loss gap with a massive production increase. Musk even apologized on Wednesday's earnings call for deriding some of their questions as "boring" and "bonehead" in May.

Tesla's cash balance fell to $2.2 billion in June, from $2.7 billion in the first quarter.

Tesla expects to product 50,000 Model 3s in the third quarter.

As Clement Thibault, an Investing.com senior analyst, said in an email, "I am certain without Musk, Tesla is worth far less than it is worth today".

But on Wednesday, a contrite Musk apologized to both and said he was exhausted from working more than 110 hours per week last quarter.

During a conference call with analysts, Musk said late Wednesday he expects Tesla to report profits in all future quarters as long as the USA economy remains strong. Tesla projected total 2018 capital spending at just below $2.5 billion.

Tesla reported its largest quarterly loss in its history on Wednesday and burned through $430 million in cash over three months.

Tesla also said it's working on a new version of its Autopilot semi-autonomous software that will have greater safety features.

Tesla's improved revenues helped the bottom line, but were offset by expenditures for severance pay after the company laid off 9 percent of its workforce in June and by expenses incurred in building the new assembly line, among other things.

Tesla management has previously predicted that it would turn a profit sometime in the third quarter. He also said people who are interested in making video games should consider applying to Tesla.

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