Tesla shares up in after hours trading as it says it should be profitable this year | City A.M.

Tesla announced revenue ahead of expectations at $4bn (£3.05bn) tonight, but its losses were steep as the electric car company continued to burn through money.

It posted a loss of $742m in the three months to 30 June as its cash pile dwindled, down to $2.2bn from $2.7bn in the previous quarter.

However, its shares rose by more than four per cent in after hours trading, buoyed by Tesla’s pledge that it would move into the black by the end of 2018.

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The company said it expected to increase output of its first mass production car, the Model 3, to 6,000 per week by late August.

It said that a total vehicle output of 7,000 vehicles per week should enable it to become “sustainably profitable”, adding that it expects to grow its production rate further in the third quarter.

Its net losses were a slight improvement on the $784m posted in the previous quarter, although this was in part due to reduced capital expenditure.

Clement Thibault, senior analyst at Investing.com said: “The slower cash burn is welcome, but doesn’t say much on its own. Tesla expects to be cash flow positive in the next two quarters, and it would be some accomplishment if Tesla manages to turn green for good.”

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Tesla had struggled to hit previously announced production targets, with problems on its production line meaning the company had employees manually assembling cars in a tent adjacent to the factory.

Chief executive Musk has also generated controversy in recent months, being rude to analysts on the earnings call for its results for the previous quarter and getting involved in a Twitter scrap with a British diver who had helped rescue a trapped Thai football team from a cave.

Both incidents dented the company’s share price and led to questions over Musk’s judgement.