Tesla’s Model 3 delayed
Wait for new electric sedan just got longer.
The wait to get Tesla’s highly anticipated Model 3 electric car just got even longer.
The mass-market electric sedan will be delayed after the Silicon Valley automaker hit production snags, including difficulty assembling the complex batteries that power the vehicle.
Tesla acknowledged Wednesday that it would not achieve its previous goal of hitting a production rate of 5,000 Model 3 vehicles per week by the end of the year, instead pledging to do so by the “late” first quarter “based on what we know now.”
The wait for a Model 3 was already quite long, compared with auto industry standards.
With several hundred thousand people placing refundable deposits for the vehicle, anyone who orders a car now is unlikely to receive it until at least 2019, and possibly later.
The company also appeared to back off CEO Elon Musk’s previous pledge to hit a production rate of 10,000 weekly vehicles sometime in 2018.
The car maker said in a letter to investors that that production rate would come sometime after the 5,000 benchmark is achieved.
Musk previously acknowledged the difficulty in beginning manufacturing of the Model 3, saying that the process is highly automated and that Tesla is intent on revolutionizing automotive production and not following standard industry practices.
Tesla will also make 10% fewer units of the Model S sedan and Model X crossover in the fourth quarter to reallocate manufacturing resources to the sputtering Model 3.
Still, the company said the Model 3 would overcome those challenges and hit a breakeven point in gross profit margin by the fourth quarter of 2018.
The acknowledgment came as Tesla reported third-quarter revenue of $2.98 billion, up 29.9% from a year earlier. That edged S&P Global Market Intelligence expectations of $2.94 billion.
The company swung from a $22 million profit in 2016’s third quarter to a net loss of $619 million, much worse than S&P’s projection of $498 million.
Tesla’s stock fell 3.6% to $309.64 after the bell.