Tesla misses first major Model 3 goal in worst financial quarter ever

Tammy Harvey
November 8, 2017

"We're doing this call from the Gigafactory bc that's where the production constraint is for the Model 3", Musk said.

The production problems helped produce a net loss of $3.70 per share in the quarter - 62 percent greater than the anticipated loss of $2.28. Software had to be rewritten from scratch and mechanical and electrical elements of one area of the plant had to be redone.

"The little guy better have a lot more skill", the Tesla CEO, plagued by a persistent cough, said during the call. Tesla is betting its first mass-market car will elevate it to become the first automaker to join America's famous "Big 3" in more than 50 years.

Tesla buried the news in an investor letter it posted online after the New York stock markets closed. Today, the company said it delivered 26,137 cars during the third quarter, but only 222 of those were Model 3s.

The company has about $3.5 billion entering the fourth quarter to make it happen.

Investors had sensed something was awry a month earlier, when Tesla said it had only made 260 of the Model 3 last quarter, well below the nearly 2,000 it had forecasted; some reports said the bottleneck was due to the carmaker assembling the vehicle by hand.

Tesla shares tumbled as much as 4.9 percent in after-hours trading on Wednesday after the company admitted it would not meet aggressive 2017 production goals of its super-important Model 3 sedan.

Some analysts say the delayed target intensifies concerns around future Model 3 targets, and other dangers to Tesla's future. Overall, the company hopes Model S and Model X deliveries will reach about 100,000 for the year. He said, "This allows us to give the following strong guarantee: the decision the system takes is likely to be the same as if we could go to each of the 1.3 million voters, ask for their opinions, and then aggregate their opinions into a choice that satisfies mathematical notions of social justice". While that's good for keeping personnel costs low, that introduces even more complexity into a schedule that may never have been as set in stone as it appeared. In particular, Musk discussed in detail the battery module assembly issue mentioned above.

Musk also criticized recent news articles reporting that Tesla had fired hundreds of workers, which anonymous sources suggested were union-leaning.

Musk also said in 2016 that a Tesla would be able to complete a cross-country trip without a driver touching the wheel by the end of 2017, and Tesla customers who paid up to $8,000 for autonomous capabilities would receive gradual updates throughout the year to vastly improve semiautonomous driving capabilities. These lines include battery pack assembly, body shop welding, and final vehicle assembly. He recalled being on the assembly line at 2 a.m. on a Sunday to help diagnose robot calibration issues and said work was being done seven days a week to solve the problems vexing the gigafactory.

Other reports by Ligue1talk

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