Electric car maker Tesla is attracting attention on Thursday after last night announcing a record quarterly net loss plus production delays and problems at its car and battery factories. One analyst has been quoted as saying company chief Elon Musk should stop 'overpromising' and his company could need more finance.
According to Reuters, Tesla posted a net loss of US$619.4m ($3.70 a share) for the third quarter to 30 September, compared with a $21.9m profit (14 cents) in Q3 2016. Revenue was up 30% to US$2.98bn.
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Tesla told the news agency its adjusted gross margin would fall to about 15%, as it delivers a higher proportion of lower-margin Model 3 cars in the fourth quarter, followed by recovery in the first quarter of 2018.
It reportedly holds refundable deposits for 500,000 of the new model.
"Based on what we know now, we currently expect to achieve a production rate of 5,000 Model 3 vehicles per week by late Q1 2018," Tesla said in a letter to shareholders.
The letter suggested Tesla can achieve weekly output for 1,000 units from some sections of its Fresno, California, factory while others are only up to 500. The key restraint is in battery pack assembly where two (of four) sections supplied by a contractor had to be reconfigured in house.
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By GlobalDataTesla added it delivered 25,915 Model S and Model X and 222 (1,500 had been planned) Model 3 units in the third quarter, 26,137 in total. Combined Model S and Model X deliveries grew 18% quarter on quarter worldwide and 4.5% year on year.
"I was really depressed about three or four weeks ago," Musk told Reuters, adding he was now optimistic because it was clear what needed to be done. "We are on it, we've got it covered," but it will take a few months longer than expected, he said.
Tesla also said it was "well capitalised" for the delayed Model 3 production schedule and predicted capital expenditures of about $1bn in the fourth quarter. That, together with spending in the third quarter, matched Tesla's August estimate of $2bn in capital expenditures for the second half of the year.
"Tesla needs to slow down and more narrowly focus its vision and come up for a breath of fresh air," Cowen and Co analysts said in a note quoted by Reuters in a later report. "Elon Musk needs to stop over promising and under delivering."
"While we expect that increased Model 3 production will provide a meaningful injection of liquidity on a number of fronts, Tesla runs the risk of requiring financing over the next few quarters, particularly if Model 3 production continues to undershoot expectations,"Nomura Instinet analyst Romit Shah said in another note cited by Reuters.
He added the market would continue to support Tesla's capital requirements.
