Tuesday, 20 February, 2018

Tesla's net loss quintuples as customers await Model 3 electric vehicle

Tesla cars to have own racing competition Electric Production Car Series gets FIA sanctioning
Nellie Chapman | 08 February, 2018, 09:44

But Musk said that the company is still on target to produce 2,500 Model 3 vehicles by the end of Q1 and 5,000 units per week by the end of Q2.

Tesla ran into what Musk has described as "production hell" at its battery plant in Reno, Nev., which hit several bottlenecks.

The convertible, with a dummy in a space suit at its wheel, is now heading toward an asteroid belt between Mars and Jupiter.

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.

While Tesla's true believers love these stunts, some analysts are questioning whether Musk should be spending more time fixing Tesla's woes.

The story of Tesla is a fascinating one by any measure: a group of Silicon Valley entrepreneurs get together to start a auto company, a feat that business-school professors have been using as the definition of economic impossibility for decades, and after only a few years they build a company that rivals the Big Three, and a vehicle that earns every accolade the industry has to offer. Tesla had originally planned to reach the target by the end of 2017, but has since moved the deadline twice. The company said that it now is "ramping up production significantly".

Specifically, Musk said on an earnings call in response to a question about the autonomous drive that they'd "probably" be able to "do a coast-to-coast drive in three months, six months at the outside". But it fell woefully short on the Model 3, which went into production in July. However, the automaker has been reallocating some of its production space to the Model 3, which limited the number of Model S and Model X vehicles it could produce. It discontinued the Roadster and moved on to the second phase of its master plan, building two native EVs, the now-famous Model S and Model X. The two vehicles went on to win just about every award and accolade in existence, including being recognized as the "safest auto ever tested" by the NHTSA and the "best auto ever tested" by Consumer Reports. But, as it did in the previous quarter, Tesla said that while it expects top hit these production targets, "our prior experience on the Model 3 ramp has demonstrated the difficulty of accurately forecasting specific production rates at specific points in time".

Now a month later, we received many reports from US-based Model 3 reservation holders who had outdated or about to be outdated delivery windows for the current Model 3 configuration (Long Range Battery Pack with premium interior).

Tesla updated today the delivery window of many Model 3 reservation holders in the United States - resulting in delays for many and a confirmation Model 3 will be available with a dual motor powertrain before the standard battery pack. But Musk today said he has no plans to step aside as CEO. Tesla said production will be constrained by the supply of cells with the old 18650 form factor.

Some analysts had expected Tesla's cash burn to slow down, but warned that it remains a risk.

All that costs money, which Tesla is burning through at a fast clip.