Is the Tesla hype wave crashing?

Tesla has successfully positioned itself as the future of automobiles. But in the present, Tesla doesn't make many cars. CNN's Peter Valdes-Dapena explains the Tesla hype machine, and what happens if that hype wanes.

Posted: Aug 2, 2018 4:47 AM
Updated: Aug 2, 2018 5:10 AM

Tesla's finances are so dicey that the largest quarterly loss in the company's history couldn't bring investors down.

The electric car company said it lost more than $717.5 million in the second quarter. But it ended up with $2.2 billion in cash at the end of June. That meant Tesla burned through $430 million worth of its unrestricted cash reserves last quarter.

Tesla spared no expense to reach its long-sought milestone of making 5,000 Model 3s in a week. But with low cash reserves, investors have worried that Tesla would need to borrow more money to keep the company afloat.

The company said it maintained its level of production, making 5,000 Model 3s in a week multiple times in July. Tesla also said it wants to churn out 10,000 Model 3s per week "as fast as we can." It expects to produce between 50,000 and 55,000 Model 3s this quarter.

Tesla's stock was up nearly 5% in after-hours trading.

The Model 3 is Tesla's first vehicle that's aimed at a more mass-market audience, and it debuted to great fanfare, with thousands clamoring to put down $1,000 reservations for the vehicle.

But analysts have said in recent weeks they thought demand for the Model 3 might be waning because of long wait times. Tesla still hasn't made any $35,000 base model cars available.

Related: Has Elon Musk lost control of his hype machine?

CEO Elon Musk made the bold promise earlier this year that Tesla would post its first quarterly profit in years this fall, Tesla doubled down on that promise again in a letter to investors Wednesday.

Some analysts viewed that claim optimistically. Others are more skeptical

"The projection of profitability in the second half of the year is admirable, but is based on selling a far more expensive version of the Model 3 then many consumers had expected," Rebecca Lindland, executive analyst at Kelley Blue Book, said in an emailed statement. "Can they sustain profitability if and when they start selling the more affordable, $35K version? Insights into the quality and quantity of the reservation pipeline, while boring, would provide investors with confidence with profitability projections."

Tesla recently laid off about 9% of its staff. Musk explained in June that the job cuts were part of a restructuring plan to eliminate "duplication of roles" and added that the layoffs should reduce costs and help the firm on its path to profitability.

Related: Tesla's magic is wearing off as Model 3 excitement dwindles

Wednesday's earnings report also comes as Musk has faced scrutiny for recent erratic behavior.

Earlier this month, he made an unfounded criminal accusation about one of the rescuers who helped save a group of young boys and their soccer coach from a flooding cave in Thailand.

During May's conference call with analysts, Musk's behavior was bizarre. He told analysts them their questions were boring, and spent a significant amount of time fielding questions from a YouTuber.

Tesla's stock has fallen more than 13% over the past six months.

Mississippi Coronavirus Cases

Data is updated nightly.

Cases: 314509

Reported Deaths: 7247
CountyCasesDeaths
DeSoto21626259
Hinds20359415
Harrison17934309
Rankin13634278
Jackson13447246
Madison10099217
Lee9980174
Jones8381163
Forrest7683152
Lauderdale7191241
Lowndes6401147
Lamar623086
Lafayette6200118
Washington5339134
Bolivar4802132
Oktibbeha462798
Panola4588107
Pearl River4512146
Marshall4443103
Warren4393121
Pontotoc420772
Monroe4113133
Union411076
Neshoba4031176
Lincoln3968110
Hancock379386
Leflore3497125
Sunflower336090
Tate334084
Pike3325105
Scott315973
Alcorn313368
Yazoo311669
Itawamba300477
Copiah297065
Coahoma295479
Simpson295288
Tippah288768
Adams286882
Prentiss279760
Marion269280
Leake268373
Wayne262641
Grenada261487
Covington259681
George248048
Newton246861
Winston227281
Tishomingo226967
Jasper221148
Attala214473
Chickasaw207857
Holmes189173
Clay185454
Stone182833
Tallahatchie178841
Clarke178080
Calhoun170832
Yalobusha164338
Smith162434
Walthall133945
Greene130633
Lawrence128624
Montgomery126942
Noxubee126734
Perry126338
Amite123142
Carroll121829
Webster114532
Jefferson Davis107133
Tunica105726
Claiborne102430
Benton99525
Humphreys96733
Kemper95828
Franklin83823
Quitman80916
Choctaw76418
Wilkinson67331
Jefferson65728
Sharkey50217
Issaquena1686
Unassigned00

Alabama Coronavirus Cases

Cases: 532895

Reported Deaths: 11001
CountyCasesDeaths
Jefferson771431528
Mobile41089808
Madison34837505
Tuscaloosa25810454
Montgomery24355588
Shelby23730249
Baldwin21191309
Lee15892171
Calhoun14522316
Morgan14324279
Etowah13861353
Marshall12250223
Houston10581281
Elmore10060205
Limestone9986151
Cullman9705194
St. Clair9702243
Lauderdale9441242
DeKalb8846187
Talladega8255176
Walker7246277
Autauga6938108
Jackson6815112
Blount6694137
Colbert6310134
Coffee5524119
Dale4850111
Russell443238
Chilton4308112
Franklin426282
Covington4136118
Tallapoosa4039152
Escambia393977
Chambers3578123
Dallas3557152
Clarke351161
Marion3130101
Pike311377
Lawrence300798
Winston275673
Bibb261564
Geneva251477
Marengo249664
Pickens234761
Barbour231756
Hale223277
Butler216469
Fayette212562
Henry189044
Cherokee184745
Randolph181742
Monroe178040
Washington167639
Macon159950
Clay156857
Crenshaw152757
Cleburne149141
Lamar142935
Lowndes139053
Wilcox127130
Bullock122841
Conecuh110629
Coosa107928
Perry107826
Sumter104832
Greene92534
Choctaw61124
Out of AL00
Unassigned00
Tupelo
Clear
53° wxIcon
Hi: 76° Lo: 48°
Feels Like: 53°
Columbus
Clear
53° wxIcon
Hi: 77° Lo: 50°
Feels Like: 53°
Oxford
Clear
48° wxIcon
Hi: 75° Lo: 45°
Feels Like: 48°
Starkville
Clear
48° wxIcon
Hi: 76° Lo: 47°
Feels Like: 48°
High pressure will continue to dominate our weather forecast for this weekend. This will keep our area filled with plenty of sunshine. However, there will be some changes next week in our weahter forecast as low pressure brings back some chances for showers and thunderstorms.
WTVA Radar
WTVA Temperatures
WTVA Severe Weather