SMM News: in the early morning of July 25, China time, Tesla officially released the second quarter financial report, although production and sales continued to rise, but the profit and loss situation has not been reversed, the net loss is $408 million. The report officially announced the latest developments at the Tesla Shanghai plant and the construction of factories in Europe, which became the main highlights of the second quarter report.
Let's take a brief look at the second quarter report.
In the second quarter of 2019, Tesla completed delivery of 95356 vehicles and production of 87048 vehicles, exceeding all previous quarterly records. The previous highest records were about 91000 delivery and about 86600 production in the fourth quarter of 2018. This new record means that Tesla's global logistics and delivery operation system has tended to stabilize and operate smoothly.
Due to the increase in delivery volume, as well as the improvement of cost efficiency, although Tesla is still losing money, it is much lower than in the first quarter. Tesla generated $614 million in free cash flow in the second quarter, with $5 billion in cash and cash equivalents at the end of the second quarter, the highest level in Tesla's history. Adequate cash flow allows Tesla to proceed more smoothly with production preparations for Model 3 in China and Model Y in the United States.
In terms of autopilot and fully autopilot functions: Model 3 received the highest rating ever in the new and stricter tests of NCAP in Europe. Tesla's new autopilot computer, about 21 times faster than our previous HW2.5 computer, has been in production since the second quarter. At the same time, with the mass delivery of Model 3 in the Chinese and European markets, autopilot function is also large-scale open application, Tesla will continue to update the function, improve the function and practicability of autopilot.
Tesla's most important project of the year, the Shanghai factory, has made great progress: in the second quarter, the Shanghai plant began to transfer machinery and equipment to the factory for the first phase of production. This is a simplified and more cost-effective second generation version of the Model 3 production line with an annual production capacity of 150000 units. The Shanghai plant is scheduled to go into production by the end of this year. According to the Shanghai GigaFactory production climbing plan, Tesla will achieve a global production target of more than 500000 vehicles within 12 months ending on June 30, 2020.
The production preparation of Model Y also began in the second quarter, because the parts are common, so the production of Model Y will be able to maximize the manufacturing capacity of Model 3, thus reducing the cost of Model Y to a certain extent. Due to the large market size of SUV, Tesla believes that Model Y will be more profitable than Model 3. Model Y will be officially produced at the Fremont plant in the United States in the autumn of 2020.
In the third quarter, Tesla will promote the construction of factories in Europe, and the final location will be determined in the coming quarters. Tesla remains committed to making a profit, but production growth, capacity expansion and positive cash flow are also the main concerns. The delivery target of 400000 vehicles in 2019 is on track as planned.
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