Tesla announces big loss as production struggles continue

FOR WEEKS now, many have wondered whether Tesla had solved the production challenges hampering the roll-out of the Model 3, the company’s first mass-market vehicle.

On Wednesday, Tesla provided an answer: Not yet.

“While we continue to make significant progress each week in fixing Model 3 bottlenecks, the nature of manufacturing challenges during a ramp 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 said in its quarterly statement to investors.

Last quarter - a period chief executive Elon Musk likened the state of the production process to “Hell” - the company said it had only delivered only 222 Model 3’s, a far cry from its goal of

I’d like to say the number at the end of Q4, but there’s too much uncertainty right now to give that with any precision. We’re like in a vertical climb here so it’s really hard to say.

producing 1,500.

During a call with investors, Musk expressed a mixture of frustration and optimism and noted that despite the low production numbers, he’s finally able to see “a clear path to sunshine.” He declined to say exactly how many Model 3’s Tesla would be producing by the end of the year, but predicted the number would be “in the thousands.”

“I’d like to say the number at the end of Q4, but there’s too much uncertainty right now to give that with any precision,” he said. “We’re like in a vertical climb here so it’s really hard to say.”

There have been about 500,000 reservations for the sedan, which many experts believe is a key to the company’s longterm profitability. But as Model 3 production sputters, Tesla reported a loss bigger than many analysts projected.

The company reported a loss of US$671.1 million (RM2.88 billion), or US$3.70 a share, compared with a profit of US$21.9 million, or 14 cents a share, for the same period a year ago. Revenue was US$2.98 billion for the three-month period, up from roughly US$2.30 billion a year ago.

The news wasn’t all bad for Tesla. The company said it recently delivered its 250,000 vehicles, a development the company called a “significant milestone,” noting that the Tesla fleet is now “about 100 times larger than it was five years ago, just before the launch of Model S.”

Musk said the primary Model 3 production issues are occurring at Gigafactory 1, the company’s massive battery facility in Nevada, where engineers have struggled to automate the manufacturing process. In addition to redirecting some of Tesla’s best engineering talent to the factory, Musk said he is personally attacking the problem alongside his employees.

“I move myself to wherever the biggest problem is at Tesla,” he said. “I really believe that one should lead from the front lines.” — Washington Post.

Elon Musk,Tesla CEO