Some day, Tesla might very well reap the benefits of bringing its own affordable, high-volume car to the electric-vehicle market. But in the meantime, the company is dishing out dough like there’s no tomorrow.
The Elon Musk-led automaker reported first-quarter losses of $330 million in a letter to shareholders Wednesday. Morever, Tesla spent $622.4 million, roughly half of its capital funding from last year, according to Automotive News. The company anticipates it will triple such expenditures in the second quarter.
The losses reportedly represent the second most in Tesla’s history, trailing only deficits from the fourth quarter of 2016.
So why so much spending?
The cash burn is a means to an end, as Tesla also told shareholders it’s on schedule to begin production of the highly anticipated Model 3 in July. This is particularly important, as releasing the vehicle on time reportedly is key to keeping the company’s share price north of $300.
The sky-high figure recently led to Tesla surpassing Ford and General Motors as the United States’ most valuable auto maker, in terms of market capitalization.
“All eyes are on the Model 3, and reaffirming the July guidance is great,” Joe Dennison, associate porfolio manager of Zevenbergen Capital Investments, said, via Automotive News. “We’re at an inflection point where we’ll see just how big of a company Tesla may ultimately be.”
Personally, we’re as excited for the Model 3 as anyone. The Chevrolet Bolt needs some competition in the affordable-EV market, and a luxury automaker joining the party certainly will spice things up a bit.
Thumbnail photo via Tesla