Tesla Stock Punished by High Costs and Delayed Production


Sales of Tesla's Model S sedan and Model X SUV rose 4.5 percent to 25,915.

Tesla Inc on Wednesday pushed back its target for volume production on its new Model 3 sedan by about three months, saying that while progress fixing bottlenecks was made, it was hard to predict how long it would take for all production issues to be fixed.

In July, as Tesla delivered the first batch of Model 3's to employees, Musk admitted the company went through "production hell" to bring all three of its cars to market. The problems could also worry the over 500,000 customers who have put down a refundable deposit on the auto.

Tesla said its production rate of the Model 3 is steadily increasing, but the high degree of automation on the Model 3 production line has proven challenging, said Tesla in the shareholder letter.

On a positive note, Tesla reported that deliveries on the whole were up 18 percent year-over-year, with 26,137 Model S, X, and 3 deliveries during the period.

Tesla's negative free cash flow expanded to -$1.4 billion, more than analysts' forecast for -$1.2 billion.

Tesla saw capital expenditures of about $1 billion in the fourth quarter and said it was "well capitalized" for the delayed Model 3 production schedule.

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Tesla could face major new requirements for cash given Model 3 problems, a possible factory in China, and plans to develop other vehicles, including an electric heavy duty truck.

Electric-car maker Tesla (TSLA) swung to a $671 million loss in the third quarter as it struggled to ramp up production of its new Model 3 small auto.

In Russia since the beginning of this year, dealers sold 46 new electric vehicles from the American company Tesla.

By the time trading ended on Wall Street on Wednesday, TSLA shares were down 3.15% to $321.08.

Tesla, led by Silicon Valley entrepreneur Elon Musk, said it now expects to build 5,000 Model 3s per week by late in the first quarter of 2018 from its original target date of December. Following the completion of the sale, the vice president now owns 1,736 shares of the company's stock, valued at $589,354.64.

The acknowledgment came as Tesla reported third-quarter revenue of $2.98 billion, up 29.9% from a year earlier.

There were reports last month that people on the waiting list were selling their US$1,000 reservations for as much as US$4,000 as new buyers looked for ways to jump the queue.