Tesla Posts $702 Million Loss in First Quarter

Tesla Inc. trimmed its first-quarter loss 11% to $702 million year on year. Revenue zoomed 33% to $4.5 billion, but quarter-to-quarter sales fell by 30,000 units.

The net loss snapped last year’s two-quarter profit streak, the company’s longest ever. CEO Elon Musk predicts more red ink in the current quarter before the electric car maker again achieves profitability in July-September.

Musk acknowledges the company may need to raise more funding, something he insisted last year was unnecessary. Now he says Tesla’s “dramatic improvements” in efficiency and cost reduction mean “there’s merit to the idea of raising capital.”

The EV maker has been ramping up production and unit sales of its first mass-market car, the $39,500 Model 3 sedan. Musk estimates the company’s overall sales volume will reach at least 360,000 units in 2019.

He also predicts that Tesla’s global production could climb to 500,000 cars this year if a new factory under construction in Shanghai can achieve significant output before year-end.

But analysts note that government-funded discounts for EVs are ending in the U.S. and China, which puts enormous pressure on pricing strategies. At the same time, observers point out, well-established carmakers are beginning to unleash their own competing EVs.