Tesla marked up its worst financial quarter ever at the end of September. With losses mounting, Tesla must speed up its deliveries of Model 3s or see investor confidence fade. Tim Higgins writes:
The Silicon Valley auto maker had aimed to make 5,000 Model 3 sedans a week by the end of this year but said it won’t reach the milestone until late in the first quarter of next year.
Tesla also reported its worst financial quarter ever, posting a loss of $619 million attributed to common shareholders in the three months that ended on Sept. 30, compared with a rare profit of $22 million a year ago. On an adjusted basis, the company’s per-share loss of $2.92 was wider than the $2.28 consensus estimate of analysts surveyed by Thomson Reuters.
The company attributed the primary delay of ramping up the Model 3, which began production in July, to battery-pack assembly at its factory near Reno, Nev.
“The combined complexity of module design and its automated manufacturing process has taken this line longer to ramp than expected,” Mr. Musk said in a shareholder letter detailing the company’s third quarter.
Mr. Musk, who on a conference call with analysts said he was struggling with a cold, seemed at a loss of words when asked about when Tesla might reach the rate of building 10,000 Model 3s a week. After a 12-second delay, he suggested it was too early to say because Tesla is still learning to build the Model 3 and later added the company faces a strategic choice between growth and capital spending.
“We want to make sure we know what to scale before we spend money on it,” Mr. Musk said.
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