Tesla CTO JB Straubel to step down after 16 years' service

Tesla's co-founder will be leaving his role as chief technology officer

Now that the Model 3 is on sale in several continents, and 77,634 were delivered to customers during the quarter, Tesla says that the majority of orders were for the long range Model 3.

But on the darker side of the ledger, Tesla posted a net loss of $408 million in Q2, to go along with a slightly-below-consensus revenue of $6.35 billion. JB Straubel, the CTO, will be replaced by the vice-president of technology, Drew Baglino, Elon Musk, Tesla's chief executive, announced on a call with investors on Wednesday. The company said it will "aim" for a profit in the current quarter, without making an iron-clad commitment to do so.

In view of these results, are there legitimate reasons for analysts and investors to be bearish about Tesla?

Tesla said this level of liquidity puts it in a comfortable position as it prepares to launch Model 3 production in China and Model Y production in the US.

Tesla said that because of its growth and operational improvements, it generated $614 million of free cash flow (operating cash flow less capital expenditures) in Q2.

Those numbers are key in light of Tesla's delivering only 63,000 vehicles during the first quarter - almost 20 percent below the 76,000 cars expected by analysts.

Musk gave credit to the theory that the Model 3 is cannibalizing X and S sales.

Tesla delivered 95,356 vehicles and produced another 87,048 in the quarter ending on June 2019, surpassing its previous quarterly records of ~91,000 deliveries and ~86,600 units built in the final quarter of 2018.

Musk is standing behind his contentious guidance of 360,000 to 400,000 vehicle deliveries for this year - but it's going to be a challenge.

On the upside, Tesla's second-quarter revenue climbed 47 percent from the same time a year ago to $5.2 billion.

Tasked with Tesla's groundbreaking battery technology since Tesla's early beginnings, Straubel directed the development of the audacious plan to make a sportscar powered by bundled laptop batteries.

"We are working to increase our deliveries sequentially and annually, with some expected fluctuations from seasonality", Musk said in the letter.

Foreign media pointed out that Tesla expects sales in China to continue to maintain strong momentum as local production will reduce transportation costs and tariffs.

Michael Schwekutsch, Tesla's former vice president in charge of electric powertrains engineering also left the company to join Apple's ranks.

"I'm not disappearing. this is not some lack of confidence in the team or anything like that", Straubel said during the call.

The Model Y, the compact SUV unveiled earlier this year, is only starting to prep for production at Tesla's Fremont auto plant, but is expected to start manufacturing by fall 2020.

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