Tesla’s growing losses as car debuts
Model 3 rollout slow; orders up
Tesla filled in some of the blanks Wednesday on its plans for rolling out its latest car — the Model 3 — even as the upstart automaker reported widening losses in the most recent quarter.
Since Friday, when CEO Elon Musk delivered the first 30 Model 3 sedans to employees at Tesla’s Fremont factory, the company has averaged
1,800 new reservations for the car each day, Tesla reported Wednesday in a letter to shareholders.
Those new reservation holders, each of them putting down $1,000 to get in line, join more than 455,000 people who have already placed orders for the Model 3.
But in its shareholder letter, Tesla warned that the first Model 3 deliveries to nonemployee customers will likely start in the fourth quarter of this year. Until then, Model 3 sedans will be delivered to Tesla employees who ordered them, with the staff serving as a kind of testing crew to hunt for glitches in the cars.
International deliveries of the Model 3 will start in “late 2018,” the company reported.
“We wish we could do all of this faster and get everyone’s Model 3 to them right away,” the shareholder letter read.
As of Friday, Tesla had built just 50 of the cars. The company now expects to build 1,500 in the third quarter and hit a production rate of 5,000 Model 3 sedans per week by the end of 2017. That rate should rise to 10,000 per week by the end of next year, according to Musk.
With a base price of $35,000 and a range of 220 miles on a fully charged battery, the Model 3 represents Tesla’s first attempt to build a car for middle-class buyers. But Tesla has chosen to start production with a more expensive version of the car with faster acceleration and greater range — 310 miles on a charge — that costs $44,000 or more.
The standard, $35,000 version will be available starting in November, the company reported Wednesday. An all-wheel drive version will be offered early next year.
The company also reported Wednesday that orders for its other cars, the Model S sedan and Model X SUV, increased in the weeks leading up to the Model 3 launch.
The company’s automotive revenue nearly doubled in the second quarter compared with the same period last year, hitting $2.29 billion. And yet, its quarterly loss also grew, from $293 million in the second quarter of 2016 to $336 million in the most recent three months. Tesla has recorded just two profitable quarters in its history as a publicly held company.
With a base price of $35,000 and a range of 220 miles, the Model 3 represents Tesla’s first attempt to build a car for middle-class buyers.