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Tesla delays Model 3 volume production amid biggest-ever quarterly loss

02 November, 2017, 00:24 | Author: Paula Vaughn
  • The hybrid powertrain on the Polestar 1. Future models will be entirely electric powered     Volvo

"We believe the Model 3 ramp is one to two months behind schedule, but are not concerned as TSLA successfully ramped production of the Model S and Model X, which are more complicated vehicles, and we are confident TSLA will achieve its production targets over the intermediate term", declared Ben Kallo, an analyst at Baird. Hopes for the Model 3 have helped propel Tesla's stock so far this year.

And the problems will continue.

Tesla will no longer reach its long-stated goal of producing 5,000 Model 3 cars per week in 2017, pushing that deadline back amid production hiccups and a massive $619 million quarterly loss.

The company said it had $3.53 billion in cash and cash-equivalents as of September 30, compared with $3.04 billion at the end of the second quarter.

Tesla reported a net loss of about $619.4 million, or $3.70 per share, compared to a net income of almost $21.9 million, or 14 cents a share, a year ago. Musk had initially set a target of December for that production. That was well below the $2.45 a share deficit that a consensus of industry analysts had forecast, according to Thomson Reuters. This is a significant milestone as the Tesla fleet is now about 100 times larger than it was five years ago, just before the launch of Model S. 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. Year-to-date, TSLA has gained 55.15%, versus a 16.68% rise in the benchmark S&P 500 index during the same period. Tesla said net orders for those vehicles hit a record level in the third quarter, setting the stage for record deliveries in the fourth quarter.

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Revenue was a stronger point for the automotive company, coming in at $2.98 billion, ahead of the $2.39 billion that analysts called for.

"We expect 3Q gross margins could come in below our estimate of 17.8% due primarily to the digestion of high start-up costs related to Model 3 production, lower pricing for Model X and weaker-than-expected volumes", said the analyst, adding that production woes should begin to improve in Q4.

The company says it's on pace to deliver 100K vehicles for the full year. Consequently, both Model S and Model X gained further market share in the USA luxury vehicle market.

Tesla stock closed at $321.08 Wednesday, down 3.15%, and was falling further in after-hours trading.

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