Despite ongoing production bottlenecks, the electric auto maker said it would continue to target Model 3 production rates of 2,500 by the end of the first quarter this year, and 5,000 by the end of the second quarter. In its investor letter, Tesla projected that, "At some point in 2018, we expect to begin generating positive quarterly operating income on a sustained basis".
Musk also continues to expect the company will be producing 1 million vehicles annually by 2020.
However, it added a caveat that "our prior experience on the Model 3 ramp has demonstrated the difficulty of accurately forecasting specific production rates at specific points in time". Just 1,550 deliveries were made in the final three months of 2017 - far below the 4100 vehicles predicted by analysts.
Tesla's total revenue for 2017 was $11.8 billion, which was also in line with analysts' forecasts.
As Ars Technica put it "unlike other doomed companies posting dire losses quarter after quarter, Tesla revenues have been sizable..."
That all fits into Tesla's goal of beating rivals by being the best manufacturer in the automotive industry. The institutional investor held 9,338 shares of the capital goods company at the end of 2017Q3, valued at $3.19M, up from 8,211 at the end of the previous reported quarter.
Tesla delivered 101,312 Model S sedans and Model X SUVs a year ago, up 33% over 2016 and ahead of its targets, according to preliminary figures released last month.
Tesla executives are expected to reveal more about progress ramping up Model 3 production and deliveries on a call this evening. That line may sound familiar: Tesla claimed similar projections in early 2016, and while Tesla did indeed have its second-ever profitable quarter that year, the company resumed its loss-making habit shortly after. But it fell woefully short on the Model 3, which went into production in July.
Tesla's future as a mass-market carmaker hinges on automated production of the Model 3, which more than 400,000 people have already reserved, paying $1,000 refundable fees to do so. "We think that if Elon Musk, if SpaceX, and can do what they did yesterday in space, they're gonna be able to produce the Model 3", Wood said.
The company said it's "systematically addressing" production bottlenecks that have plagued the Model 3. He told investors on February 7 that if SpaceX could manage to launch a Roadster into space, then the Model 3's manufacturing problems could be solved. "We have to solve passive optical extremely well", Musk said, referencing running image recognition based on camera data. "Due to the success of this project, we're seeing an increase in demand for Powerpack, our commercial energy storage product".
The Model 3 is pegged at a starting price of $35,000, though options can take it north of $50,000. He compared Tesla's approach to that of Henry Ford: a relatively simple product in what, at the time, is the world's most advanced manufacturing facility (in Ford's case, the River Rogue plant in Dearborn, Michigan).
In conclusion, Tesla said its long-term competitive advantage will be the factory, not the auto, and its 1 million unit target for 2020 is still in play, it said.