Tesla has bad news if you're waiting for a Model 3
Nov 02 2017
Tesla Inc (TSLA.O) on Wednesday pushed back its target for volume production on its new Model 3 sedan by about three months, saying it was hard to predict how long it would take to fix all production bottlenecks.
Tesla said the main constraint was its battery module assembly line at its Nevada Gigafactory, where the company had to redesign part of the production process.
The electric auto maker's $35,000 Model 3 sedan is the vehicle that could move Tesla from a luxury niche automaker and into the mainstream.
MetLife Inc. reported third-quarter adjusted profit and sales that beat expectations, announced a new $2 billion stock repurchase program and said it would divest its remaining Brighthouse Financial Inc. stake, but the stock still fell 1.7% in after-hours trade as it swung to a net loss.
Last month, Tesla reported it delivered 26,150 vehicles in the third quarter, a 4.5 percent rise on the same period of 2016, but added that "production bottlenecks" had left the company behind its planned ramp-up for the $35,000 Model 3. Dimensional Fund Advisors LP boosted its position in Tesla by 2.0% during the first quarter.
Tesla stock has gained 51.15% over the year.
Tesla's soaring stock has made the company the second-most valuable US automaker behind General Motors Co (GM.N), which had annual net profit of $9.4 billion in 2016.
Tesla acknowledged Wednesday that it would not achieve its previous goal of hitting a production rate of 5,000 Model 3 vehicles per week by the end of the year, instead pledging to do so by the "late" first quarter "based on what we know now".
All in all, Tesla will reduce the production of these cars by 10% in the fourth quarter in order to reallocate these resources into improving its Model 3. Tesla said installations for its energy storage business more than doubled from a year ago.
Tesla, Inc. (NASDAQ:TSLA) last session's volume of 5.64 million shares was lower than its average volume of 5.76 million shares. Excluding items, the company lost $2.92 per share.
There were reports last month that people on the waiting list were selling their US$1,000 reservations for as much as US$4,000 as new buyers looked for ways to jump the queue.
The news wasn't entirely bad for Tesla, however, the carmaker reporting revenues for the third quarter of $2.98 billion, a record, and up from the consensus forecast of $2.95 billion.