Tesla Capital Raise Seen Near as Musk Burns Through Cash Coffers
- Author: Arturo Norris Feb 25, 2017,
Feb 25, 2017, 7:53
The earnings report that was highly anticipated showed that there are bigger challenges than SolarCity on Tesla's plate. A prediction that Tesla contradicted as the company is positive that it can produce more than 5,000 units of Model 3 within a week when full production kicks into high-gear during the fourth quarter of this year, according to Bloomberg.
It's an announcement of a move that should go some way to meet demand for the Model 3; 115,000 pre-orders were received within 24 hours of its unveiling. When combined with Model S and X production targets, the company should come in right around 200,000 vehicles produced this year.
Elsewhere in the letter, Tesla said it is "on track" to start limited Model 3 production in July, with a ramp up of production to 5,000 vehicles per week in the fourth quarter of 2017, and 10,000 per week in 2018.
Earlier, Tesla reported an adjusted loss of 69 cents a share on revenue of $2.28 billion.
Instead, Tesla said it is shifting toward a business model where customers purchase their rooftop solar systems upfront.
Tesla posted mixed results in the first earnings data seen since the company acquired SolarCity previous year. Besides its earnings miss, investors are also punishing Tesla for its increased capital expenditures related to the Model 3. But Musk also hinted that there could be a few surprises.
The company also mentioned during the conference call that chief financial officer Jason Wheeler is leaving. "But it'll all be here and it'll be a hive of activity, and I'll be personally down there looking at the line as I was with the Model S line and I'm confident that I don't think that's going to be an issue".
Wheeler will be replaced by Deepak Ahuja, who retired from Tesla in 2015 after being with the company for several years. The plans could see Tesla operate up to five Gigafactories, with operations at Nevada and Buffalo, New York already underway.
In his letter to shareholders, Musk wrote that the company had plans to grow its service that lets drivers make repairs at their workplace or home as "80 percent of our repairs are so minor that they can be done remotely".
Tesla has assured investors that it is on schedule to produce its long-awaited mid-market Model 3 electric vehicle. Tesla listed $131 million in energy generation and storage revenue, up from $23,000 the quarter before.