Tesla losses widen despite quarterly revenues moving up a gear

Innovative US carmaker Tesla Motors doubled revenues during the second quarter of 2016, but this acceleration could not put the brakes on losses in the period.

Higher deliveries of its upmarket vehicles helped Tesla’s revenues between April and June climb to $2.79bn, in comparison with the $1.27bn it took in during the second quarter of 2017.

Net losses for the period ending 30 June were $336m, higher than the $293m losses it showed in its earnings report in the corresponding quarter of 2016.

Founder Elon Musk continues to prioritise heavy spending on research and development as he attempts to stay ahead of the chasing pack with technology such as electric cars and autonomous driving.

Tesla is also preparing to roll out its most affordable vehicle to date, as well as ramping up production towards the end of the year.

Net losses for the period ending 30 June were $336m

In a statement, the carmaker said it expected revenue to increase further in the two remaining quarters, while attempting to limit its costs.

“For the second half of 2017, we expect strong improvement in operating leverage as revenue should significantly increase in the second half of the year as compared to the first half, while operating expenses should remain essentially flat,” the statement read.

Tesla’s shares were boosted 8% in after-hours trading following the close on Wall Street on Wednesday.

Analysts at Citigroup said they expect to see Tesla push higher in the short-term after recent underperformance.

“Q2 delivers far more positives than negatives, which we think means the shares are likely to see some near-term strength after the recent pullback,” the research note said.

“Though the next few quarters will be crucial for execution, we think Q2 will leave investors feeling incrementally better about key stock debates & the 2018 outlook.”