Model 3 bottlenecks cause Tesla to burn more than just rubber

Not everything Elon Musk touches turns to gold, apparently, as his electric vehicle company Tesla burned through $710m in cash in the second quarter despite impressive revenues of $3.2bn.

The company claims to have overcome this and said it will achieve a production run-rate of 5,000 vehicles per week even before it installs a new automated line in Germany. Tesla was able to produce 2,270 cars a week for most of April, bringing the company much closer to its 2,500 cars per week goal. First-quarter results compare to consensus estimates calling for a per share loss of $3.48 and $3.22 billion in revenues.

Joseph Spak, of RBC Capital Markets tried to dig into the number of initial reservations for the Tesla Model 3 that haven't been cancelled because of the production delays.

How about announcing the location of the Tesla Model Y production "maybe in the last quarter", but not before the end of the year, Musk said, and in a new Chinese Gigafactory to boot?

Musk-led SpaceX organized a Hyperloop pod competition between 2015 and 2018 to demonstrate technical feasibility of the Hyperloop technology and the current announcement seems an outcome of this competition itself.

Analysts expect Tesla, Inc.

Tesla reported a revenue of $3.41 billion Dollars (roughly 4.4 billion CAD). The firm's quarterly revenue was up 43.9% on a year-over-year basis.

Tesla faces a crucial time in its 15-year history, with the company under the gun to show it can efficiently and profitably build its first vehicle intended at high volume. "Cash burn and trajectory of Model 3 production ramp remain the most likely impediment to the stock moving higher".

Tesla on profits and margins: "Our long-term gross margin target of 25% for Model 3 has not changed". In addition, Tesla makes the Model X luxury electric SUV.

It's particularly interesting since Tesla generally doesn't release deliveries per market on a monthly basis.

Investors and analysts have expressed worry about how fast Tesla has been burning through cash, and stopping losses would be a major turn in the road for the company.

While the unprofitable California-based carmaker, reporting first-quarter earnings later May 2, has welcomed competition, it's coming at a tumultuous time. Production problems have been so bad that CEO Elon Musk has tweeted he's sleeping at the plant and that automation is overrated and more humans are needed to build the cars. But Tesla's shares nevertheless declined almost 6% in after-hours trading to $283.10. The company's revenue for the quarter was up 26.4% compared to the same quarter previous year. Currently, Tesla's Model S and Model X, both priced near $100,000 with options, are the company's main products. Over the last three months, insiders have sold 5,529 shares of company stock valued at $1,786,841. Finally, Vetr downgraded Tesla from a "buy" rating to a "hold" rating and set a $331.97 price objective on the a report on Tuesday, January 9th. For the quarter, the electric auto maker posted an adjusted diluted loss per share loss of $3.35 on revenues of $3.41 billion.

  • Leroy Wright