DETROIT: Tesla’s record net loss in the first quarter and fast-burn through millions of dollars is raising questions about the company’s ability to pay all its bills.
CEO Elon Musk conceded that criticism is valid but said during a sometimes-testy conference call with analysts Wednesday that it’s “quite likely” Tesla will make money and have positive cash flow in the third quarter.
“It’s high time we became profitable,” said Musk, who also promised restructuring this month to achieve profit goals. “The truth is you’re not a real company until you are, frankly. That’s our focus right now.”
Wednesday’s results showed Tesla tearing through $745.3 million in cash in the first quarter, due largely to the slow production ramp-up of the Model 3 mass-market electric sedan. The cash burn could put pressure on the company to borrow more or sell additional shares to raise more cash.
When asked by an analyst on a conference call about all-important reservations for the Model 3, Musk cut him off, calling questions dry and “not cool.” He then allowed multiple questions from a person via YouTube.
Tesla began the quarter with $3.96 billion in cash and equivalents, but that fell to $3.22 billion by quarter’s end.
The company said in April that it won’t need more capital this year as it generates added cash as production and sales of the Model 3 grow.
But Model 3 production still isn’t near the level of 5,000 per week that Musk promised last year. That’s also the level needed for Tesla to make money.
Problems with building Model 3s at a plant in Fremont, California, got so bad during the quarter that Musk has tweeted he’s sleeping at the factory, automation is overrated and more humans are needed to build the cars.
Strong sales of the car are key to generating cash to pay operating expenses, fund capital spending and make upcoming debt payments.
The company said in a note to investors Wednesday that Model 3 production is on the rise and that it expects profitability in the second half, under generally accepted accounting principles.
“This is primarily based on our ability to reach Model 3 production volume of 5,000 units per week,” the company stated.
In its letter, Tesla said Model 3 production hit 2,270 per week at the end of April, the third straight week that it reached over 2,000.
The company said it improved battery module production during the quarter, overcoming a large bottleneck, and it now expects to hit 5,000 Model 3s per week around early July.
The Model 3 starts at $35,000 but can easily top $50,000 with options.
Musk said the restructuring would involve getting rid of third-party contractors that have grown out of control. “We’re going to scrub barnacles on that front,” he said.
He admitted that Tesla made a mistake by adding too much automation too quickly at the factory.
“We have temporarily dialed back automation and introduced certain semi-automated or manual processes while we work to eventually have full automation take back over,” the company said.
Tesla posted a record $709.6 million net loss in the first quarter, which amounts to a loss of $4.19 per share. Excluding one-time expenses such as stock-based compensation, the company lost $3.35 per share. Revenue grew by 26 percent from a year ago to $3.4 billion.
The giant loss in a critical quarter for the 15-year-old company beat Wall Street estimates. Analysts polled by FactSet expected an adjusted loss of $3.54 per share. Revenue exceeded estimates of $3.28 billion.
During the quarter the company burned cash at a rate of $57 million per week.
Tesla has had only two profitable quarters in its nearly eight years as a public company.
The company said it will reduce capital spending for 2018 from $3.4 billion to $3 billion and said it can be cut further based on the cash it generates.
Tesla cash burn accelerates, but Elon Musk predicts profit ahead
Tesla cash burn accelerates, but Elon Musk predicts profit ahead
- Tesla burned $745.3 million in cash during the first quarter
- Tesla posted a record $709.6 million net loss in the first quarter, which amounts to a loss of $4.19 per share
Foreign buying of Saudi stocks hits $1.33bn ahead of Feb rule change
RIYADH: Foreign investors made net purchases of around SR5 billion ($1.33 billion) in Saudi stocks during January, coinciding with the announcement that the market would be opened to all categories of non-resident foreign investors — individuals and institutions from around the world — directly and without conditions.
According to the Financial Analysis Unit at Al-Eqtisadiah, January’s foreign buying represents the largest monthly purchases since 2022, excluding June 2024, when Aramco held a secondary offering, and September 2025, following a Bloomberg report that the Saudi Capital Market Authority, or CMA, would allow foreigners to hold majority stakes in listed companies.
Since the market-opening announcement on Jan. 6, Saudi stocks rose by about 10.6 percent by the end of the month. These results were accompanied by a rally in the banking sector, which is expected to benefit most from the lifting of ownership restrictions and strong fourth-quarter results.
Rising oil prices also supported increases in Aramco, the largest stock by weight on the Tadawul All Share Index, alongside gains in Maaden following new discoveries and higher gold prices, as well as SABIC, after news of asset sales in Europe and the Americas that had previously caused losses for the company.
The new amendments removed the regulatory framework for swap agreements, which had been used to allow non-resident foreign investors to gain only the economic benefits of listed securities and to enable direct investment in stocks listed on the main market.
Foreign purchases in January reflected buying by foreign investors who were already in the market ahead of the decision’s implementation in early February.
Foreign buying last month was likely driven by active funds. With the easing of restrictions, the market’s weight in emerging-market indices is expected to rise later, which could in turn attract additional inflows from passive funds that follow market and company weights in these indices.
The largest impact is expected on TASI’s weight in emerging-market indices, following the proposed increase in foreign ownership caps for listed companies, pending CMA approval.
Foreign investors accounted for around 41.7 percent of total market purchases in January, compared with just 5.6 percent in 2018, before joining emerging-market indices, highlighting their growing influence in the market.
With the market rally and foreign buying in January, the value of foreign investors’ holdings rose to SR465.5 billion, representing 4.87 percent of the total market and 12.67 percent of free-floating shares. Their influence also increased in terms of free-floating shares, rising from 11.01 percent at the end of 2024 to 12.4 percent by year-end.
The latest regulatory decision is expected to improve market liquidity over the long term, make stock valuations fairer, expand the investor base, deepen the market, and enhance overall efficiency.
Foreign investment rules in Saudi stocks
Foreign investments in Saudi stocks are currently subject to several restrictions, including that non-resident foreign investors, excluding strategic foreign investors, may not own 10 percent or more of the shares of any listed company or its convertible debt instruments.
Foreign investors — all categories, resident or non-resident, except strategic foreign investors — may not collectively hold more than 49 percent of any listed company’s shares or convertible debt.
These limits are in addition to any restrictions set out in companies’ bylaws, other statutory regulations, or instructions issued by the relevant authorities that apply to listed companies.
