Tesla has just posted a $619-million loss this quarter, the biggest quarterly loss in its history.
News of the loss along with an announcement that targets for Model 3 production would have to be scaled back took a hit on Tesla shares Wednesday. After hours trading put the shares at $304.80, which is down about 17 percent from a 12-month high, but still trading at about 50 percent higher than they were at the beginning of the year. This time last year, the company posted a $22-million net profit.
The American electric car manufacturer has been struggling with ramping up Model 3 production to meet its ambitious targets and has cited issues at the Nevada battery factory as the culprit for the holdup. Just 260 Model 3s have been delivered this quarter, but the company was hoping to have 5,000 units a week rolling off the production line by the end of this year. That target has been pushed back to March 2018.
ALSO SEE: Tesla Fires Hundreds Amid Model 3 Production Bottlenecks
The company appears to be spending a lot of cash trying to fix the production bottlenecks at the gigafactory —$1.4-billion was spent this quarter alone, which is a bit more than last quarter. The company has also been in the news recently for labor issues, layoffs, and possible unionization attempts at the factory.
The Model 3 was supposed to be a big milestone for Tesla as the first mass-produced and affordable car for the company. The small sedan starts at $35,000, about half the price of a base Model S, and nearly 500,000 people paid a $1,000 deposit when it debuted for a chance to buy one. Tesla also revealed plans for an autonomous semi truck and has promised almost total autonomy for the Model S and X for the near future. Tesla CEO Elon Musk is quite well known for making ambitious promises, but people still seem to be buying into it, as it is still the most valuable American automaker right now.
[Source: Automotive News and Reuters]
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