Elon Musk: 'Dry' Investor Questions 'Killing' Him

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YouTube channel owner and retail investor Gali Russell is gearing up to ask Tesla (TSLA) CEO Elon Musk a question during Wednesday evening's earnings conference call. "The truth is you're not a real company until you are. That's our focus right now".

Tesla on Wednesday reported first-quarter earnings results that were better than Wall Street analysts had expected. Over the last three months, insiders have sold 5,529 shares of company stock valued at $1,786,841.

Tesla reported a revenue of $3.41 billion United States dollars (roughly 4.4 billion CAD).

That's not welcome news for a company that is having serious problems realizing its production goals, but we will have to wait and see how things ultimately pan out in the growing electric vehicle market.

The announcement could set off another gold rush among cities and states vying to become the location of the plant that would not only produce the Model Y, Tesla's first mass-market priced SUV but also likely include a battery plant. The $50,000 Model 3 is the company's most affordable auto and the one on which it's hinging its growth. The company said it expects to move Model 3 gross margin from negative in Q1 to close to breakeven in Q2, and "highly positive" in Q3 and Q4.

That said, it might not make sense to open a second factory overseas while Model 3 production is still struggling at home.

"The number of third party contracting companies we're using is out of control", he said.

Tesla's Model S already took the crown in the large premium sedan segment - though there's some controversy about considering the Model S "a large premium sedan".

Tesla has only had two profitable quarters since it went public in 2010. Excluding one-time expenses such as stock-based compensation, the company lost $US3.35 per share. As the reservations list dwindles - and as other options from more established automakers come into play, a process which is expected to accelerate over the coming few years - the competition for mid-size premium EVs will only increase. If you get bullish and expect that Tesla will jump to 3,000/week in that time period, we're talking perhaps 10,000 Tesla Model 3s in April.

Revenue for the quarter totaled US$3.41bn, beating the consensus estimate of US$3.22bn. Toni Sacconaghi of Sanford C. Bernstein, who rates the company the equivalent of a hold, bore the brunt of Musk's sharpest words after asking about capital requirements.

But Tesla's shares nevertheless declined almost 6% in after-hours trading to $283.10. At this rate, without additional financing, the company is at risk of running out of cash before the end of the year. Many had predicted massive cash hemorrhages and a fairly bleak outlook for the future based on continued production woes, factory worker injury reporting scandals and credit rating downgrades. "We wonder what spending is deferred and for how long", CFRA analyst Efraim Levy wrote in a note to investors. At one point it had more than 500,000 potential buyers on a waiting list.