Tesla misses first major Model 3 goal in worst financial quarter ever

Elon Musk chairman and chief executive officer of Tesla Motors Inc

Tesla expects to hit a Model 3 production rate of 5,000 vehicles per week by late Q1 2018.

Tesla warned that its adjusted gross margin would decline to about 15 percent due to a higher mix of lower-margin Model 3 deliveries in the fourth quarter, but then recover in the first quarter of 2018.

The company produced just 260 Model 3 cars in September, which was waaaaaaaaaay short of the 1,500 vehicles it had hoped to produce.

One reason for the weak numbers was the trouble Tesla has been having with the launch of its Model 3, the company's first mainstream battery-electric vehicle.

And the problems will continue.

Also buried: a massive loss of $671.1 million in the third quarter, bringing its loss through the first nine months of 2017 to $1.66 billion.




Tesla said it had record net orders and deliveries of its Model S and Model X in the third quarter. Main Street Research LLC bought a new stake in shares of Tesla in the 2nd quarter worth about $602,000.

Tesla reported a net loss of about $619.4 million, or $3.70 per share, compared to a net income of almost $21.9 million, or 14 cents a share, a year ago.

Long the darling of Wall Street, Tesla shares have radically outperformed much of the market, and especially the domestic auto industry, this year. The electric vehicle producer reported ($1.33) earnings per share (EPS) for the quarter, beating the consensus estimate of ($2.00) by $0.67.

Tesla had other significant expenses. Piper Jaffray Companies set a $386.00 price objective on shares of Tesla and gave the stock a buy rating in a research note on Monday, October 16th. The company opened 18 stores and service stations worldwide during the quarter, and set up 126 new Supercharger stations to try to prepare for the increase in demand from Model 3 buyers.

Electric carmaker Tesla has notched up its biggest quarterly loss to date, sending its shares down more than 5% in after-hours trading. However Tesla plans to produce about 10 percent fewer cars of both models in the fourth quarter as more resources shift toward Model 3.

Complications with Tesla's manufacturing processes have slowed production of the Model 3, a vehicle widely considered key to Tesla's future success. Its revenue totaled $2.51 billion down -6.84% from the previous quarter. That, industry experts say, is among the reasons Tesla is nowhere close to its aggressive goal of building 500,000 vehicles annually by next year, a lot of them Model 3s. Energy generation and storage accounted for 11 percent of Tesla's third quarter revenue.

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