Tesla’s Cash Burn Slows as Revenue Grows

Tesla Inc.’s negative cash flow slowed to $739 million in April-June from more than $1 billion each in three of the past four quarters.

Automotive revenue grew 23% to $3.4 billion in the period, mainly due to deliveries of its new Model 3 sedan. But the company’s net loss nearly doubled to $718 million.

The electric carmaker says it needs to build 7,000 EVs per week, or 350,000 per year, to become sustainably profitable. The company predicts it will reach that point and become cash flow positive in the second half of this year.

At the end of June, Tesla barely met a repeatedly delayed goal of building 5,000 of its new Model 3 sedans, a car whose success is considered essential for profitability. Now the company says its weekly output of Model 3s will reach 6,000 units at least once by late August and 10,000 sometime next year.

Tesla aims to build 55,000 Model 3s in the current quarter, or an average of about 4,200 cars per week. When the Model 3 began production 12 months ago, CEO Elon Musk said the company would make 100,000 of the cars by the end of 2017 and 400,000 this year.

In the meantime, Tesla says its batterymaking Gigafactory in Nevada achieved an annualized production rate of about 20 gigawatt-hours in July, making it the world’s largest battery plant