Tesla posts $702M Q1 loss as deliveries fall sharply; Musk promises turnaround

Tesla Model 3 Red
Tesla Motors

Speaking during an earnings call, Tesla co-founder and CEO Elon Musk revealed the California-based company posted a sizable $702 million loss during the first quarter of 2019. That figure — the fourth-biggest loss since Tesla went public in 2010 — reflects the difficulties faced by the company as it ramps up delivery of the Model 3 in the United States and abroad, and flattening demand for the bigger Model S and Model X.

Tesla delivered about 63,000 cars during the first quarter of the year. That’s an alarmingly low figure; in 2018, its third- and fourth-quarter deliveries stood at 83,500 and 90,700 units, respectively. After exiting production purgatory, the period during which Tesla struggled to mass-produce the Model 3, the company seems to now be stuck in delivery hell. Musk explained shipping its entry-level model to customers in North America, in Asia, and in Europe from a single factory is a nightmare.

“This is the most difficult logistics problem I’ve ever seen, and I’ve seen some tough ones,” he said. Tesla is far from being the only company in this situation; almost every SUV made by BMW is manufactured in South Carolina, for example. Mercedes-Benz is in a similar situation with its own SUV portfolio. The problem isn’t impossible to overcome, and Musk strongly believes deliveries will rise in the not-too-distant future.

The storm isn’t over quite yet, however. Musk predicted Tesla will post another loss in the second quarter of the year, though it will be much smaller than its first-quarter loss. He expects the company will deliver between 90,000 and 100,000 cars. And, he promised the company will return to profitability by the third quarter of 2019 “as the impact of higher deliveries and cost reduction take full effect.”

The cost reduction measures he alluded to include closing several stores around the world, and switching to an online-only sales model. Tesla also rejiggered its lineup of models several times, adding and removing variants of its cars, and changing its pricing strategy.

Tesla’s disappointing performance wasn’t the only subject brought up during the earnings call. Musk also announced Tesla is getting into the insurance business. The company’s plans will address the fact that its cars are normally more expensive to insure through bigger providers than comparable vehicles from more mainstream brands.

“We are creating a Tesla insurance product. We are hoping to launch that in about a month. We think it will be much more compelling than anything else out there,” Musk said during the call. Pricing, information, and availability will presumably be released in the coming weeks.

Emerging Tech

Purdue’s robotic hummingbird is nearly as nimble as the real thing

A team of engineers in Purdue University’s Bio-Robotics Lab have developed an impressively agile flying robot, modeled after the hummingbird. Check it out in all its robotic hovering glory.
Product Review

The segment-bending 2020 Porsche Cayenne Coupe is an SUV in a track suit

For the 2020 model year, Porsche is expanding the third-generation Cayenne lineup with a more stylish Coupe-badged model. It's lower than a regular Cayenne, a little bit wider, and it wears a more muscular design.
Cars

With Tesla bleeding money, Elon Musk initiates hardcore spending review

After posting a sizable $700 million loss in the first quarter of 2019, Tesla announced it will review every expense, no matter the size, to keep spending in check. Company CEO Elon Musk will personally approve every 10th expense page.
Cars

GM thinks up new electronic brain for its cars, allowing over-the-air updates

General Motors is launching a new electrical architecture to support more tech features in its cars. The system debuts on the 2020 Cadillac CT5, and will roll out to most other GM models by 2023.
Cars

Insiders claim the Tesla Model S nearly became the long-rumored Apple car

Apple offered to buy Tesla in 2013, according to an analyst who spoke to people familiar with the talks. Apple made Tesla a great offer, but the deal fell through when Elon Musk refused to step away from the company he helped found.
Product Review

Hyundai’s luxurious Tucson suffocates you with more – in a good way

The refreshed 2019 Hyundai Tucson may be one of the more affordable compact SUVs on the market, but there are more safety features than before as standard, as well as a hint of luxury.
Cars

Parents will never miss soccer practice with BMW’s new 523-horsepower SUVs

BMW is launching M Performance versions of its biggest SUVs, the X5 and X7. While not full-on M models, they do pack 523-horsepower twin-turbo V8 engines, allowing both SUVs to sprint from zero to 60 mph in under five seconds.
Cars

Don’t trust Tesla’s new autonomous lane-changing feature, Consumer Reports warns

Consumer Reports warns that last month's Autopilot updates that enabled automatic lane changing may put you at risk of a ticket or accident. Reaction times lagged what a human could do, testers say.
Cars

Texas awaits one signature to put a statewide stop to red light cameras

When Texas Governor Greg Abbott signs state House Bill 1631 into law, he will bring a halt to red light cameras in the state. The central issue in the bill's passage is the presumption of guilt of the registered owner of the car.
Cars

EV owners may still need to stop at a Chevron station, but not to buy gasoline

EVgo, the operator of a sizable network of electric car charging stations, has partnered with Chevron. Five Chevron stations located in California will install EVgo chargers that electric car owners can pay to use.
Cars

Mercedes-Benz GLE SUV tries to balance power and efficiency with mild-hybrid V8

The redesigned Mercedes-Benz GLE will get a V8 mild-hybrid powertrain when it launches in the United States later in 2019. The 4.0-liter twin-turbocharged V8 makes 483 hp on its own, but can also get a 21 hp electric boost.
Cars

Audi TT will get the ax to make way for electric cars — and the R8 may be next

Once a design leader, the Audi TT will meet its demise to make room in Audi's lineup for more electric cars. Audi executives confirmed plans to kill off the TT at the automaker's annual shareholder meeting.
Cars

Honda recalls 119,000 2019 CR-V crossovers over fears of airbag deployment

A manufacturing defect in select 2019 Honda CR-V crossovers could cause the airbag to malfunction and unexpectedly deploy, leading the automaker to recall some 137,000 vehicles worldwide, 118,598 of them in the U.S.
Cars

Cadillac confirms V-Series performance versions of the CT5 and CT4

Cadillac will unveil CT5-V and CT4-V sports sedans in Detroit May 30. They will be the latest cars in the General Motors luxury brand's V-Series performance line, which celebrates its 15th anniversary this year.