Electric car company's worst financial quarter result yet comes from heavy Model 3 production spending amid build woes

The Tesla Model 3's production issues have contributed to Tesla posting a loss of £468 million in the last financial quarter.

The ‘bottlenecks’ which have delayed the delivery of the Model 3 in line with Tesla’s ambitious targets are being addressed, but there are still problems. 

Tesla’s 5000-per-week target for Model 3 production has pushed back to late in the first quarter of 2018. Tesla will be clearer as to exactly when this will happen in its next quarterly report. For now, it's still uncertain when the problems will be alleviated. 

“While we continue to make significant progress each week in fixing Model 3 bottlenecks, the nature of manufacturing challenges during a ramp-up such as this makes it difficult to predict exactly how long it will take for all bottlenecks to be cleared or when new ones will appear,” the company's latest report reads. Increasing orders for the Model 3 are both helping Tesla and exacerbating the problem.

Tesla's hesitant outlook comes as it celebrates total production of 250,000 cars since the brand’s birth in 2003, as well as the ever-stronger performance of the Model S and Model X; the two are on track to achieve 100,000 deliveries worldwide across the year. Overall, Tesla’s automotive revenue grew by 10% year-on-year compared with the same period in 2016.

It’s thought that given the level of investment in the production of Model 3, Tesla will likely post more encouraging financial results for investors once production gains momentum.

Read more: 

Tesla falls behind on Model 3 deliveries

European Commission to host battery technology summit

Our Verdict

Tesla Model 3 2018 road test review hero front

Lowest-price, largest-volume Tesla yet has wooed the buying public in the US. Should UK buyers join the queue for a Model 3?

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Comments
8

2 November 2017

Trouble is, they don't expect to make a profit until 2020.  By then, not just Jaguar, but many other companies will be eating into their customer base.  Ideally (of course) it would have made sense to make a profit while your competitors catch up.  I still say Tesla should have made a Mokka-sized SUV, or Evoque-class SUV.  To me, that's where the profit would be.

2 November 2017

Telsa will need to get a grip on spending in 2018.  And whilst the Model 3 is having production problem the Bolt is proving rather successful with sales increasing every month and currently sits at  2,600 a month in the US, pretty much doubling Leafs best ever month in any year since 2015.

typos1 - Just can’t respect opinion

2 November 2017

Agree with xxxx.  GM continue to post very good quarterly results.  This despite the fact that in Q3 they made a $2.3bln charge because of deferred tax assets no longer being usable following Opel/Vauxhall sale.  Full size pickups continue to make easy money and GM Financial made record revenues.  I am pretty sure they can hit the Model 3 with price cuts on the Bolt.  I can’t explain Tesla’s share price, even after the hit, for me there are just too many excuses from Musk and he continues to burn through cash borrowed from Wall Street and from optimistic future customers.

2 November 2017

on the scale of the US continent, let alone the rest of the world, Tesla sales are pitifully small, even when all the excuses and pretexts are taken into account.

The worry for current and prostective customers is the re-sale/trade-in value of their cars in 3/4/5 years when the technology should have profressed sufficiently to render their expensive cars totally obsolete and worthless. Even for rich people, depreciation (company cars might be excluded from this process?) hurts a lot when its curve is pointing down vertically...

2 November 2017

I must say I've seen a lot of Teslas on the road in the UK. There must be a lot of people either unconcerned about depreciation or on some soft lease deals. I suppose that while Mr Musk is still bringing in a fortune from his other business interests, he can afford to take the hit for a while longer. Whether his shareholders agree with that is another matter.

2 November 2017

Tesla should never have built cars after the Tesla Roadster. They would have been better off being a car technology development company like Bosch.

 

Some of the owner's problems on the forums regarding the Model S and Model X automatically are shocking. Drive by wire steering issues and lack of parts (for over six months) after an accident means I'd never consider one. 

3 November 2017

Go on the Telsa forums and for the most part owners love 'em. Go on the driver surveys like the Driver Power where the Tesla S came top, ahead of Lexus. The exact quote "Tesla Model S tops Driver Power 2016 with highest-ever satisfaction rating" 

typos1 - Just can’t respect opinion

10 November 2017

Electric cars (including hybrids which have to be plugged into the mains) are destined to end up in a very expensive dustbin, leaving a lot of people out of pocket and a lot of companies in a dire financial position.  Electric cars are going nowhere.

I don't need to put my name here, it's on the left

 

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