Tesla Earnings: Model 3 Production Is Ramping Up


Last fall, Musk just revealed a semi truck slated for production in the near future and a new ultra-luxury Roadster.

Annually, billions of dollars worth of Tesla Model 3's are sold. Tesla has not being able to make an annual profit since it has gone public in 2010.

Production delays blamed on battery issues resulted in only 1,550 deliveries in the fourth quarter, far below the 4,100 vehicles expected by analysts - meaning revenue from the highly anticipated vehicle has yet to hit Tesla's bottom line. The adjusted loss eliminates one-time expenses, including stock-based compensation. Proceed for the quarter was $3.3 billion, which was in line with analysts' forecasts.

Tesla spent $787 million in capital expenditures in the fourth quarter, below its projections, but said capital spending in 2018 would be "slightly more" than in 2017 due to expanded production at its Fremont factory and Nevada Gigafactory.

First, the Tesla Roadster carried on the maiden test flight of Mr Musk's SpaceX rocket took a slight detour off its planned path to Mars and headed off-road towards the Asteroid Belt. Tesla's shares also are in stratosphere, up 8 percent from the beginning of this year. Clement Thibault, a senior analyst with the web site Investing.com, grumbled about Musk's recent fundraising efforts for The Boring Co., his new tunnel-drilling company.

Those showroom displays helped increase pre-orders for the Model 3, Tesla suggested. The production and delivery of the Tesla Model 3, their "affordable" $35,000 (£25,227.30) auto seems to be hitting several roadblocks. For example, he said, the company has almost completed an automated battery module assembly line which will speed production at its Nevada battery factory. At the beginning of the year, the company said it expects to churn out 2,500 Model 3s per week by the end of Q1 2018, and 5,000 per week by the end of Q2 2018.

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For the full year of 2018, Tesla says it expects "hundreds of thousands" of people to switch to Tesla's electric vehicles as it ramps up Model 3 production. Tesla had incurred a loss of $121 million in the same quarter a year ago. But it fell woefully short on the Model 3, which went into production in July. In early January the company released a statement on Q4 Model 3 deliveries ahead of today's Q4 earnings call, and Tesla said it had delivered just 1,550 Model 3s in Q4.

During the fourth quarter, the overall reservations for the new model were pretty much on a par.

CEO PAY: This will be Musk's first earnings call since last month's announcement of a proposed all-or-nothing pay package for him. Insiders have sold 11,967 shares of company stock valued at $3,817,242 in the last ninety days. Tesla fans will certainly hope that it gets it done in three months instead of six. The proposal must still be approved by Tesla's shareholders, who are scheduled to vote in late March. "We have to solve passive optical extremely well", Musk said, referencing running image recognition based on camera data.

"Perhaps I'm wrong, in which case I'll look like a fool", he said.

CASH BURN: Tesla has lofty targets, including building a plant in China and launching a small SUV in 2020. All that costs money, which Tesla is burning through at a fast clip.

American electric automotive maker Tesla has reported their biggest revenue loss for the fourth quarter of 2017. But Musk has long argued that LIDAR is too expensive and too bulky for Tesla's vehicles.