Tesla burns $1.09 billion in cash on way to record second quarter loss

Electric car maker Tesla Inc. burned through $US739.5 million ($NZ1.09 billion) in cash last quarter, paving the way to a company record $US717.5 million ($NZ1.05b) net loss as it cranked out more electric cars.

But CEO Elon Musk pledged to post net profits in future quarters, and on a conference call, he apologized to two analysts he cut off on the company's first-quarter call. Telsa's shares jumped 9.3 per cent to $US328.85 in after-hours trading.

The net loss more than doubled from the same quarter a year ago, and was slightly larger than the first quarter. But Tesla's cash burn in the second quarter slowed from about $US1.1 billion.

On the call, Musk also said he expects the company to avoid returning to the markets for capital and to be "essentially self-funding on a go-forward basis." Tesla would use money generated from sales to fund big projects such as an estimated $US2 billion new factory in China and another plant in Europe, he said.

The company also said that Model 3 gross profit margins turned slightly positive during the quarter as it worked out expensive kinks in its manufacturing system.

Last quarter, Musk mistreated two analysts by calling their queries about the company's cash needs and Model 3 orders "so dry" and "not cool." The call triggered a stock sell-off and raised questions about Musk's behavior.

But today, a contrite Musk apologised to both and said he was tired from working more than 110 hours per week last quarter. "It's not right," he told an analyst from RBC Capital Markets. "Hope you accept my apologies."

In a statement released after the markets closed Wednesday, Tesla said it expects to produce 50,000 to 55,000 Model 3s in the third quarter, an increase of at least 75 percent from the first quarter.

Tesla spent millions as it reached a goal of producing 5,000 Model 3 sedans per week by the end of June. It now says production is rising, with the goal of 6,000 per week by the end of August. The company said it expects to reach 10,000 Model 3s per week "sometime next year".

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.

Tesla's cash balance fell to $US2.2 billion in June, from $US2.7 billion in the first quarter.

Musk said he expects the company to achieve sustained quarterly net profits from now on, barring an unforeseen event, supplier problems or economic downturn. He also said that production efficiencies should rise as more Model 3s are built, and he said that he expects to make to around 750,000 vehicles in calendar year 2020.

The company said it has cut back on capital spending by changing its strategy to produce the Model 3 on existing assembly lines, one in a giant tent, rather than adding all-new lines. Tesla projected total 2018 capital spending at just below $US2.5 billion. That's substantially less than the 2017 level of $US3.4 billion.

The Palo Alto, California, company said it lost $US4.22 per share from April through June as revenue grew 43 per cent to just over $US4 billion. Adjusted for stock-based compensation, the company lost $US3.06 per share. That was worse than Wall Street estimates. Analysts polled by FactSet expected a $US2.88 loss per share.

Tesla also said it's working on a new version of its Autopilot semi-autonomous software that will have greater safety features.

During the second quarter, Tesla laid off 9 percent of its workforce as it worked toward Musk's promise of making money. The company has never turned an annual profit and has had only two profitable quarters since becoming public in 2010. Tesla has also asked parts suppliers for refunds.

The sun shines off the rear deck of a roadster on a Tesla dealer's lot in Denver, Colorado. Source: Associated Press



Pregnant woman claims she was served cleaning solution instead of latte at McDonald's in Canada

A Canadian woman pregnant with her third child says she was served a cleaning agent at a McDonald's restaurant instead of the latte she ordered.

Sarah Douglas said this week that she was taking her son to a baseball tournament Sunday morning in the Alberta town of Lethbridge when they stopped at the McDonald's drive-thru for the coffee.

When she took a sip she knew something was wrong and pulled over to spit it out.

Douglas says she returned to the restaurant to complain and a staff member told her that two cleaning lines had been hooked up to the latte machine. Douglas then contacted Alberta Health Services.

A spokeswoman for McDonald's issued an apology on behalf of Dan Brown, the restaurant franchisee.

Poznan, Poland - March 18, 2016: McCafé is a coffee-house-style food and drink chain, owned by McDonald's.
McCafe coffee cups (file picture). Source: istock.com

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'It's tragic' - girl, 14-months-old, killed in dog attack at rural Aussie property

The family of a 14-month-old girl fatally mauled by a dog in country Victoria had only been in the township for a few months before her death.

The toddler was set upon by the family's German Wirehaired Pointer at a rural property at Neerim Junction, in the Gippsland region, early this morning.

The little girl died at the scene despite treatment by paramedics.

Mayor of Baw Baw Shire Joe Gauci said the dog had been seized by the local council, and the family had consented for it to be destroyed.

Counselling services for the community had been set up at the local hall, he said.

"When it's a young child, I think it's even harder for the community to take," he told reporters.

"It's tragic. It's a new family that's moved into our local area, and I don't know how you put words to it. It's just a tragic event that's happened. And we'll just work through it."

Chief executive officer of the shire, Alison Leighton, said the girl's death would "shake" the community.

"Neerim Junction ... is a tight-knit community and we certainly want to make sure that they feel council's support in a tragedy such as this," Ms Leighton said.

Police are investigating the circumstances of the attack and will prepare a report for the coroner.

German Wirehaired Pointer (file picture).
German Wirehaired Pointer (file picture). Source: istock.com