The harsh reality was that Tesla’s second quarter profit margin was -19%.
Even so, in September, Tesla is still being valued at well over $40bn. Not bad for a car maker that expects to sell fewer than 400,000 vehicles in 2019 and probably won’t make a full-year profit.
As we head into the latter part of 2019, Tesla is poised to make some big announcements that, it insists, will finally push it into sustainable profits.
This pivots around tapping into the Chinese market, still the world’s biggest for EVs, and launching the Model Y, an SUV based on the Model 3.
At the end of August, the talent of CEO Elon Musk for picking up excitable publicity from Tesla fans was in full effect when pictures from inside the Gigafactory 3 appeared online. Although the building was clearly complete – impressive when construction had only begun in December 2018 – it was not recognisably a car factory.
Even so, a Model 3 bodyshell was seen front and centre, described as the first “China-built” 3.
A few days later, this car was displayed at the World Artificial Intelligence Conference in Shanghai, as Musk flew in for a public debate with Jack Ma, China’s richest man. In terms of publicising Tesla’s arrival in China, Musk could hardly have done a better job.
However, his tendency to promise unusually rapid progress remains: the claim is that Chinese Model 3 production will begin before the end of this year.
The Model Y is being promised for 2020 and hype about the Tesla ‘truck’ continues to swirl online. But there are big hurdles.
Musk’s purchase of solar panel maker Solar City is in difficulty, with plans for a huge plant in Buffalo, New York stuttering and a lawsuit from retail giant Walmart, which accuses Tesla of “gross negligence” because of alleged solar panel fires.
Musk is also pressing on with the promise of full autonomy in the near future, something the rest of the car industry doesn’t believe is safely achievable.
Tesla has also launched its own insurance scheme in California to try to reduce owner costs.
And although the Model 3 is doing relatively well, sales of the Model S and X are falling as rival EVs from premium car makers, such as Audi’s E-tron, finally go on sale.
Tesla remains the definitive outlier, a car firm that is defying normal financial gravity and seems to be able to raise cash and expectations while losing huge amounts of money.