Tesla Is Still Burning Cash, but Elon Musk Sees a Turning Point

Tesla’s shares fell sharply in extended trading during the call, to about $285. They have lost more than 20 percent of their value since their peak last year, when Tesla surpassed the Detroit automakers in market value.

While Tesla still has many fans and believers, analysts now tend to take a cautious look at Mr. Musk’s pronouncements.

In a report issued before Tesla released its results, a Barclays Capital analyst, Brian Johnson, told investors that he believed the company to be “fundamentally overvalued.” Barclays expects Tesla shares to head down to $210.

In the first quarter, Tesla recorded a loss of $785 million on revenue of $3.4 billion. And the company burned through $745 million in cash, a significant increase from $112 million in the previous quarter.

Tesla has not had a profitable year since it was founded in 2003.

The loss in this year’s first quarter is the latest sign of trouble for the company. In March, Moody’s Investors Service lowered Tesla’s credit rating over concerns about the slow pace of Model 3 production and warned that the company could face a cash crunch late in the year without an infusion of capital. California’s job-safety watchdog is looking into injuries at the company’s plant in Fremont, where workers have complained about dangerous conditions.

And federal safety experts are also investigating the fatal March 23 crash of a Tesla Model X sport-utility vehicle that was operating with its Autopilot driver-assistance system engaged.

In the conference call, Mr. Musk complained of “fundamentally misleading” news reports about the Autopilot system’s involvement in some serious crashes. “There should be no question that Autopilot improves safety,” he said. Serious accidents that occur while Autopilot is operating, he said, are “almost always” the result of “complacency,” when drivers fail to keep their attention focused on the road.

Amid all of those issues, the Model 3 is perhaps the most serious area of concern. With a starting price of $35,000, it is meant to be Tesla’s most affordable and top-selling vehicle. The company has been counting on a quick increase in sales to bolster revenue and enable Tesla to pare losses and pay off debt while still investing heavily in future vehicles.

Mr. Musk said Wednesday that Tesla had become capable of making more than 3,000 battery packs a week at a giant factory in Nevada. At its car plant, parts of its assembly line, such as the paint shop, are not yet up to that rate, he said.

Mr. Musk acknowledged anew that Tesla had erred in trying to build a highly automated production line to assemble the Model 3. For example, it had been using a robotic machine to place lightweight, sound-deadening material on top of battery packs.

“It was an incredibly difficult machine to make work,” he said. “It was basically picking up fluff. Hands are way better doing that.”

Moreover, Tesla later learned that the material wasn’t even necessary. It made little difference in dampening sound inside the car.

Correction: May 2, 2018

An earlier version of this article referred incorrectly to recent turnover in Tesla’s management. While several senior executives have left, the head of operations in Europe is not among them.

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