Palo Alto, Calif. - Tesla's profit streak is over. Big time.
The electric car company said Wednesday that it lost $702 million last quarter. Its revenue was also down 37% compared to the prior quarter.
Wall Street was already bracing for what one analyst called an "apocalyptic" quarter — but the results were still far worse than expected.
While the company has posted big losses of this size before, analysts surveyed by Refinitiv predicted that Tesla would be about $301 million in the red for the quarter. The actual number was more than double that amount.
Tesla stock dipped slightly after earnings were released, but later edged back to even.
The company had posted back-to-back profits in the previous two quarters. Last quarter, for example, Tesla recorded a profit of $139 million on sales of $7.2 billion.
There were a couple of reasons Tesla was so far in the red, according to Karl Brauer, executive publisher at Kelley Blue Book and Autotrader.
First, a $7,500 federal tax credit was cut in half for Tesla vehicles at the beginning of the year. Then, brands like Porsche, Audi, Mercedes and Hyundai are all entering the electric vehicle market, giving Tesla meaningful competition for the first time in the company's history, Brauer said.
"None of these issues, by themselves, would cause the severe drop in sales and revenue Tesla experienced in Q1, but the combination was powerful," Brauer said in an email Wednesday evening. "Even more troubling? None of these issues are going away. This is the new normal for Tesla."
CEO Elon Musk said during a conference call with investors that last quarter may have been rough, but Tesla has a rosy outlook. Demand for all three of Tesla's electric vehicle models is strong, he said.
"We also have a lot of markets [abroad] where we haven't yet tapped into demand, especially the Model 3," Musk said.
Tesla revealed earlier this month that it delivered about 63,000 vehicles to customers in the first three months of 2019 — a 31% drop compared to the prior quarter, and the single largest decline Tesla has ever reported.
The company said Wednesday that it expects its sales figures to look much better next quarter. The company has said it encountered "many challenges" ramping up deliveries of its vehicles abroad, but said those issues should be smoothed over soon and a major sales bump could be on the way.
Slowing sales are bad news for Tesla because the company needs cash in order to pay down its sizable debts. Tesla said it ended last quarter with $2.2 billion of cash on hand, which the company had earlier described as "sufficient."
Executives also said they expect cash stores to "grow steadily" in the months ahead.
At one point on the call, Musk briefly alluded to a controversy that has dogged Tesla for the past several months.
An analyst on Wednesday's earnings call referred to quarterly reports as a "distraction" that pulls people's attention away from Tesla's leadership and dominance in the electric car market.
Musk laughed and said, obviously, he would "prefer we were private."
The Tesla CEO has been in a standoff with the US Securities and Exchange Commission ever since he tweeted that he was "considering" taking the automotive company private last year, and that he had secured funding. The SEC said funding has not been secured, and has accused Musk of misleading investors.
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