It appears Tesla CEO Elon Musk wasn’t lying when he said in October the company was in “production hell” due to problems concerning production of the Model 3 sedan.
The company on Wednesday announced its results for the quarter ending September 30 and some of the numbers released are worrying, to say the least.
The big one is the loss of $619 million. Tesla is in expansion mode but the loss is still a new record. In fact, it is almost double the $336 million Tesla lost in the previous quarter and quite the contrast to the $21.9 million profit the company made during the same period a year ago, suggesting major struggles in dealing with Model 3 production.
The small electric sedan started production in July and during the three-month period Tesla only managed to build 260 examples. That’s far short of the 1,500 the company had hoped to build by September.
2018 Tesla Model 3
In a letter to shareholders, Tesla blamed insufficient supply of batteries from its Gigafactory for the Model 3 production hiccups. The company also said welding processes and final assembly tasks at its car plant were moving slower than other parts of the manufacturing system. It was revealed in October that Tesla had fired “hundreds” of workers at its car plant after conducting a performance review.
In an effort to speed things up, Musk told analysts on a conference call that Tesla will be “adding robots at the choke points” on the Model 3 production line.
Despite this, Tesla says it won’t be able to build Model 3 sedans at the rate of 5,000 per week by December, as it had promised in July. The company now expects to reach that target in early 2018.
It wasn’t all bad news. Revenues were higher than expected, coming in at $2.98 billion versus an expected $2.94 billion. Tesla also said it expects production of its Model S and Model X to total about 100,000 units in 2017.