Tesla Model 3 Deliveries Level Out - Production Woes Continue

03 May, 2018, 16:03 | Author: Salvatore Jensen
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"That's our focus right now".

But in a letter to shareholders Tesla is still bullish and calculates that if it can bring Model 3 production volume to 5,000 units per week and can grow gross margin to break-even in Q3 and Q4. He stated that he believes that Teslas are now ready for full Level 4 or Level 5 autonomy from a hardware standpoint, lacking only more computing power and that the cars could be ready by the end of next year.

Tesla CEO Elon Musk cut off two Wall Street analysts on the company's earnings call Wednesday, dismissing their questions as "dry". He then allowed multiple questions from a person via YouTube. On Wednesday, Tesla said it had a cash balance of $2.7 billion at the end of the first quarter. Even if Tesla isn't willing to offer easier and more flexible ways to get one, other vehicle companies surely will.

In the first four months of 2018, TSLA traded above $350 on three occasions and below $300 on five, with the longest drought coming in late March when it lost 15% of its value in a matter of days only to recover equally as fast. Tesla also needs a software platform to manage the ridesharing network.

Tesla reported that it hit a production run high of 2,270 Model 3 vehicles per week in April.

The move may prove to be "a mistake" given the importance of the Model 3 build out, said Jonas.

"It's high time we became profitable", said Musk. "We do not want to go down this path again".

"We did go too far in [on automation] and automated some pretty silly things", he told investors.

Tesla has engaged it suppliers and distributor to enhance their own capacity in order for the company to achieve its production objective.

Tesla's service and gross loss increased to $118 million USA and operating expenses increased by to $1.05 billion, up 14% from the first quarter of 2017 and up 2% from the most recent quarter. That compares with a loss of $1.33 in the year-ago period.

It's expected that Tesla will optimize the level of automation on the Model 3 line following a planned 10-day shutdown in production in the second quarter. It took in $3.4 billion during the quarter, besting the $3.2 billion that had been forecast.

Tesla has had only two profitable quarters in its almost eight years as a public company.

The effects of Tesla Inc (NASDAQ: TSLA)'s already known deliveries decline and production beat were made manifest in the firm's first-quarter earnings report. Moody's also warned that Tesla's liquidity is not enough to cover its 2018 discretionary capital expenditure expected at $2 billion as well as another $1.2 billion in convertible debt that matures early next year. The short answer is that, from a technical standpoint, Tesla will be ready by the end of next year, Musk said.

Somewhat unexpected, revenues from the company's "Energy Generation and Storage" more than doubled Y-o-Y to $375 million, up from $151 million in Q1 2017.

But that could slow future product development. But that $2 billion acquisition came with a $2.9 billion debt load.

Amid all of those issues, the Model 3 is perhaps the most serious area of concern. At one point it had more than 500,000 potential buyers on a waiting list.



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