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Tesla Delays Model 3; Posts $619.4 Million Loss

Tesla Delays Model 3; Posts $619.4 Million Loss

Tesla today reported the company’s largest quarterly loss ever of $619.4 million. The larger-than-expected earnings loss comes with news that the electric automaker is pushing back its production forecast for the Model 3 sedan by nearly three months.

Within the third quarter Tesla says it sold 26,150 vehicles, which generated revenues of $2.98 billion, an increase of 30 percent over the same period in 2016. Vehicle sales for the company were up 4.5 percent over 2016, buy Tesla noted that “production bottlenecks” delayed scheduled deliveries of its new Model 3 during the reporting period.

Adding to the delay problem with the Model 3, Tesla also disclosed that it plans to produce 5,000 Model 3 units per week by “the end of the first quarter” of next year. Originally, Tesla CEO Elon Musk planned to produce that many per week by December of this year.

Tesla added that it has been difficult to project how long it will take to resolve some of the production bottlenecks the company faces. According to the company, one of the primary production problems has been associated with the battery module assembly line, which the company has had to completely redesign parts of this particular production process since the car’s launch.

By the end of Sept. Tesla had produced only 260 Model 3 sedans. The company’s original production forecast called for at least 1,500 to be produced by that date.

Tesla is now forecasting it will produce 500,000 vehicles in 2018.

Today’s earning results and news of further delays in Model 3 production have led the company’s stock to slide.





 

About Nick Saporito

AutoVerdict Senior Editor Nick Saporito began writing about cars at age 13. Nick ran a couple of automotive enthusiast sites for several years, before taking some time off to focus on his career and education. By day he's a marketing executive in the telecom world and by night he hangs out here at AV. You'll find him focusing on tech, design and the industry's future.
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  1. Andrew_L
    Tone
    I'm guessing for some time, even given their current burn rate. They have a high-profile brand, decent products in the pipeline, the network of superchargers and other significant assets. Getting a partner to buy a chunk of equity if they get strapped for cash flow would likely be do-able, I'd imagine. My bet is that a company with money burning a whole in their pockets and looking for opportunities beyond their existing business would be an ideal fit. Apple, for example.

    They wouldn't have to buy Tesla -- just buy a chunk and perhaps develop a strategic partnership in exchange a minority chunk of the business providing enough cash to get Tesla over 'production hell'.


    Just saying investors at some point are going to get sick of hearing loss after loss after loss.
    Tone
    Andrew_L
    How long can they keep functioning like this?


    I'm guessing for some time, even given their current burn rate. They have a high-profile brand, decent products in the pipeline, the network of superchargers and other significant assets. Getting a partner to buy a chunk of equity if they get strapped for cash flow would likely be do-able, I'd imagine. My bet is that a company with money burning a whole in their pockets and looking for opportunities beyond their existing business would be an ideal fit. Apple, for example.

    They wouldn't have to buy Tesla -- just buy a chunk and perhaps develop a strategic partnership in exchange a minority chunk of the business providing enough cash to get Tesla over 'production hell'.
    arutherford
    Everybody off the dingy!

    Andrew_L
    How long can they keep functioning like this?
    nsaporito
    Tesla only sold $575,000 in ZEV credits during Q3. In contrast, they sold $139M in ZEV during Q3 2016.

    That's part of their subpar results here.

    Maybe someday they will learn to make money producing actual products.
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