Friday, 22 June, 2018

Tesla losses spike as it fights to ramp up Model 3

Nellie Chapman | 08 February, 2018, 05:13

On Tuesday afternoon, he watched the private rocket company that he runs, SpaceX, successfully launch its first Falcon Heavy.

After Tesla Autopilot had a hard year with several delays for the release of features under the new hardware suite, Tesla is now promising those features in 2018 - along with the delayed fully self-driving demonstration. Tesla surprised many by announcing a 500 mile range for the semi previous year.

Producing the Model 3, a sedan that starts at $35,000, on a mass market scale is widely considered crucial to Tesla's ambition of becoming a major automaker.

The electric auto company continues to predict it will be able to produce 5,000 Model 3 vehicles a week by the end of the second quarter of this year.

The company also has another unusual source for its reserves: customer deposits.

Tesla had aimed to do a cross-country US drive in one of its vehicles using fully autonomous driving capabilities by the end of a year ago, but obviously it didn't make that goal, or you'd have heard about it.

Among the topics likely to be discussed on the conference call later today with analysts and investors are those shifting production targets, last month's announcement of a proposed all-or-nothing pay package for Musk and how much cash Tesla is burning through.

Those "new Autopilot features" have been known as "Enhanced Autopilot features", like "On-ramp to Off-ramp", which would enable what sounds like level 3 autonomous driving on the highway. Close observers can't help but wonder: Does Tesla, which doesn't use lidar, have the hardware necessary to deliver on its promises? But Musk said that the technology is well on its way.

At one point, Musk said the company would be producing 20,000 Model 3 vehicles per month by December 2017, but it ended up delivering just over 1,500 Model 3 vehicles during the entire fourth quarter. And in November, Tesla unveiled not just one but two new vehicles: an electric Semi truck and a next-generation Roadster sports auto.

Tesla took in $686 million in customer deposits in the third quarter.

Tesla's resiliency and apparent recovery amid the volatile United States stock market has impressed ARK Investment Management CEO Catherine D. Wood, who recently spoke on CNBC about her positive outlook on the California-based electric auto maker and energy company. That's something the company hasn't previously done.

"Our neural net, which expands as our customer fleet grows, is able to collect and analyze more high-quality data than ever before, enabling us to rollout a series of new Autopilot features in 2018 and beyond", Musk said in the letter. For the year, the company reported nearly $12 billion in revenue.

Still, Tesla's factory needs are vast and growing. And the company's assembly plant in California reportedly struggled to accelerate production. The company has not said where it will make its Semi truck or the new Roadster. Or is China still top of the list?

Tesla CEO Elon Musk certainly isn't one to shy away from making big promises.

The final deliveries tally for Q4 was 28,425 Model S and Model X units and 1,542 Model 3 units for a total of 29,967 deliveries. The question looming large for Wall Street: Just how long can Tesla go before it returns to the equity or debt markets?