Elon Musk Takes on Short Sellers Ahead of Earnings

2017 Tesla Model X

2017 Tesla Model X

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

Contrition pays off - just ask Elon Musk. One of them was director Pete Bannon, who came to Tesla in 2016 after almost eight years at Apple following the PA Semi acquisition.

Tesla ended the second quarter with US$2.78 billion in cash after spending US$609.8 million in quarterly capital expenses.

Despite its emphasis on cost controls, analysts remained mixed on whether Tesla would have to return to the securities markets to fund its build-out - a capital raise Musk insists the company can avoid.

During May's conference call with analysts, Musk's behavior was freaky.

This time, Musk said there was no excuse for bad manners and blamed his previous attitude on a lack of sleep due to the long hours he was working.

"I'm super happy", said Ross Gerber, CEO of Gerber Kawasaki Wealth & Investment Management and one of Tesla's most outspoken bulls. That put it on track to retake the title of most valuable USA automaker from General Motors Co (GM.N). But it is also the most heavily shorted company on Wall Street, with an army of investors betting billions that the cash-burning company's turbulence would ensure its imminent collapse.

The company ended the quarter down $300 million in cash to a total of $2.2 billion.

Stuart Bowers, Tesla's vice president of engineering, said the update would allow Tesla vehicles to "automatically attempt to change lanes" and suggested it could help drivers transition to and from highways. That was more than 11 percent above the closing price for the trading day, but still below the $370 peak that was recorded in June.

The company's net loss more than doubled from the same quarter previous year, and was slightly more than the loss in the first quarter of 2018. "It's good to be looking at the other end of this nightmare production ramp". "The popularity of Model 3 is a true testament to the product".

Cash from selling the Model 3, which starts at $US35,000 but runs far higher with options, is key to holding off more borrowing and turning a profit. It delivered its 200,000th electric auto - including its more expensive Model S and X vehicles - in July, a threshold which means a $7,500 federal subsidy begins to phase out two quarters after that milestone was reached.

Despite a rocky first half - ncluding missed manufacturing targets, a downgrade of its debt and a recent report showing the company took the unusual step of asking suppliers to refund money on payments already made - Tesla's stock has been resilient.

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