(Reuters) — Tesla said it would produce its new Model 3 sedan at a profit after several recent weeks in which output stabilized, buoying hopes that the electric vehicle maker led by Elon Musk will stanch its financial losses in the second half of the year.
Chief Executive Musk is under intense pressure to prove he can deliver consistent production numbers for the sedan, Tesla’s lowest-priced model and the key to its plans to become a mass-market automaker, after a host of manufacturing challenges and concerns it was running through cash too quickly.
Despite Tesla reporting a record loss that doubled to $718 million in the second quarter, shares jumped as much as 11 percent in after-hours trading, as investors focused on steadier production volumes and a slower rate of cash burn. That put it on track to retake the title of most valuable U.S. automaker from General Motors Co.
The company cut its capital spending plans and said it would not hit its long-term rate of producing 10,000 Model 3s per week until next year, trading off production ramp speed for financial health.
“We like the more muted tone of the company’s outlook, with the absence of unnecessary new stretch goals,” said CFRA analyst Efraim Levy. “Perhaps it reflects a more cautious Elon Musk.”
The outspoken Musk, who told analysts last quarter that he refused to answer their “boring” questions, apologized multiple times on Wednesday during a post-earnings call for his past behavior.
Tesla said that during July it had hit an earlier goal of building about 5,000 Model 3s per week “multiple times”, and reiterated a…