US-based electric (EV) producer Tesla Motors Inc. reported a
net loss in GAAP terms of $293m for Q2 2016, a deeper loss both
year-on-year (y-o-y) and on a sequential basis.
The company made a loss of $184m on Q2 2015 and $282m in Q1
The increase in this figure in the most recent quarter was
driven by a capital expenditure of $295m as the company seeks
in to increase vehicle production capacity and accelerate the
construction of its lithium-ion (Li-ion) battery
'Gigafactory’ in Reno, Nevada to reach a
production target of 500,000 vehicles in 2018.
Gross revenue, also in GAAP terms, was $1.3bn, meanwhile, up
from $1.15m in Q1 2016 and $1.2bn in Q2 2015.
In a letter to shareholders, Tesla’s CEO, Elon
Musk, and chief financial officer, Jason Wheeler, noted that
the company had increased its previously reported Q2 vehicle
delivery level to 14,402 from 14,370.
It plans to deliver 50,000 vehicles in H2 2016, which would
still leave it below a previously announced target of between
80,000 and 90,000 vehicles for the full year of 2016.
Tesla was producing 2,000 vehicles a week by the end of Q2.
According to Musk and Wheeler’s letter, barring
further supply constraints, the company will end Q3 with a
production rate of 2,200 vehicles per week and Q4 with 2,400
vehicles per week.
In a note on the earnings, Barclays analysts observed "a
larger-than-expected loss, lower cash generation and a
guide-down in H2 gross margins and a guide-up in H2 operating
expenses (which mathematically implies lower operating
However, Barclays added: "Tesla stock is less driven by
earnings results today than it is on future prospects. And
while we continue to see risk to the bright future prospects
painted by the bulls, it’s tough for us to see
anything in this result
that otherwise changes this outlook."
Tesla did not reveal much in terms of further details
regarding the construction of the Gigafactory or lithium demand
in its shareholder letter or subsequent earnings call.
Tesla to buy Solar City for $2.6bn
Tesla Motors Inc. will purchase solar panel manufacturer
Solar City Inc. in a deal valued at around $2.6bn.
The tie up between the two companies, both of which
entrepreneur Elon Musk holds a leading role in (CEO of Tesla
and chairman of Solar City), will be an all-stock transaction
and will see Solar City shareholders receive 0.11 shares of
Tesla for each Solar City share, which equates to
This is below a range of $26.50-28.50/share proposed in late
June by Tesla for the takeover. Tesla expects the deal to close
in Q4 2016 subject to review by the US Securities Exchange
Commission review and approval by both sets of shareholders. A
45-day "go-shop" provision means Solar City will have the
option to take advantage of any higher bid made in the interim
SQM drops objections to Albemarle’s
Chilean lithium producer Sociedad Quimica y Minera SA (SQM)
will not pursue a legal challenge against a production increase
due to be carried out by its competitor and neighbour,
In a joint announcement made by the rival producers, which
both produce lithium products in the Salar de Atacama in
northern Chile, the companies said the challenge would be
abandoned as part of a plan to work together to "safeguard the
ecosystem" of the salar.
The companies said they would now seek to develop a
"coordinated and informed environmental administration" to
protect their surroundings.
Albemarle, the ultimate owner of Rockwood Lithium, in
January received permission to triple its rate of brine
extraction from 142 litres per second (l/s) to 442 l/s and
signed a memorandum of understanding (MoU) with the government
to increase its level of lithium carbonate production in Chile
to 70,000 tpa from current levels of 24,000 tpa.
SQM’s plans to attempt to block the expansion
were leaked in April. An SQM spokesperson at the time told
IM that the company’s only
concern was that the increased rate of production could affect
its own environmental commitments.