Tesla posts a huge loss, as Model 3 output lags

Nov 02, 2017, 00:23
Tesla posts a huge loss, as Model 3 output lags

Since then, Tesla has dealt with highly publicized Model 3 production "bottlenecks" and delivered a paltry number of vehicles well below its targets, issued a recall, and fired hundreds of employees (which spawned a lawsuit).

Musk previously acknowledged the difficulty in beginning manufacturing of the Model 3, saying that the process is highly automated and that Tesla is intent on revolutionizing automotive production and not following standard industry practices.

And the problems will continue.

Electric-car maker Tesla (TSLA) swung to a $671 million loss in the third quarter as it struggled to ramp up production of its new Model 3 small auto. Because of delays at its battery facility in Nevada, Tesla said it now expects to be making 20,000 Model 3s per month by the end of the first quarter of 2018.

Tesla reported that cash and cash equivalents rose to $3.53 billion on September 30 from $3.04 billion at the end of the second quarter, but Tesla in August raised $1.8 billion by selling debt. North Star Investment Management Corp. raised its position in shares of Tesla by 2.8% in the 2nd quarter. On average, analysts anticipate that Tesla will post ($6.70) earnings per share for the current fiscal year.

Tesla initially planned to achieve that target in December. The company opened 18 stores and service stations worldwide during the quarter, and set up 126 new Supercharger stations to try to prepare for the increase in demand from Model 3 buyers.

The niche carmaker has made inroads among luxury auto buyers with the advanced technology and innovative design in its Model S sedan and Model X SUV. However Tesla plans to produce about 10 percent fewer cars of both models in the fourth quarter as more resources shift toward Model 3.

The acknowledgment came as Tesla reported third-quarter revenue of $2.98 billion, up 29.9% from a year earlier.

By the time trading ended on Wall Street on Wednesday, TSLA shares were down 3.15% to $321.08. Dimensional Fund Advisors LP now owns 98,790 shares of the electric vehicle producer's stock worth $27,492,000 after acquiring an additional 1,894 shares during the last quarter. Energy generation and storage accounted for 11 percent of Tesla's third quarter revenue.

Shares of Tesla have fallen almost 17 percent from a 12-month high of $385 in September, but are still up 50 percent from January fueled by belief in the long-term prospects of the company.

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