Published: Thu, February 08, 2018
Markets | By Rosalie Gross

Tesla turns to Model Y, as Model 3 slowly exits "production hell"

Tesla turns to Model Y, as Model 3 slowly exits

Musk said the Model 3 production hell resulted from the company being a little bit overconfident, and a little too complacent about the company's ability to make batteries. By the end of its second quarter, the Model 3 production rate will be 5,000 a week.

The company released its Q4 2017 result on Wednesday night in the USA, reporting negative free cash flow of $276.8 million - the lowest in more than a year - and $675 million in losses attributable to shareholders; notching up nearly $2 billion in losses for the whole year.

Investors also suffered a $3.04 loss per share, slightly better than the $3.16 loss analysts had forecast.

Much attention from analysts and the public has been focused on the Model 3.

Electric auto maker Tesla's fourth-quarter 2017 revenue matched Wall Street's expectations Wednesday, but the firm racked up a higher-than-expected loss and reported no improvement - and a lack of confidence - in the production timeline for its Model 3 sedan.

Falcon Heavy test flight profile
Falcon Heavy test flight profile

"The competitive strength of Tesla long term is not going to be the vehicle (s), it's going to be the factory, we're going to productise the factory", he said. Cars that were promised in early 2018 are now being pushed to 2019. Insideevs reports that if Tesla is struggling to make profits on a $55,000 (£39,642.90) variant of the Model 3, they are not likely to really make any on the $35,000 base model.

Those showroom displays helped increase pre-orders for the Model 3, Tesla suggested. "What we can say with confidence is that we are taking many actions to systematically address bottlenecks and add capacity in places like the battery module line where we have experienced constraints".

"At some point the company must produce vehicles, profitably, at a high volume", Brauer said.

The Model 3 sedan was first announced by CEO Elon Musk in March 2016. "The timeline to do that remains murky".

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