|By Kramer Phillips | 3 years ago|
Tesla will need three more months than expected to reach its production target of 5,000 new Model 3 sedans a week, the company announced Wednesday. The announcement, which projects Tesla meeting the goal by early 2018 instead of December as originally planned, coincided with the company also announcing that it had just suffered its biggest quarterly loss ever.
Tesla posted a net loss of $619.4 million for the third quarter, which ended September 30. It netted a profit of $21.9 million in the same quarter last year.
The loss further strains Model 3 production, which has been suffering from various production “bottlenecks,” according to Tesla. The company manufactured only 260 Model 3s from July-September this year—about three cars a day, which industry experts said is far below-average for established car makers.
Meanwhile, the company is under added pressure as around 400,000 customers have already placed advance down-payments for new Model 3s and will expect Tesla to deliver. Those advance deposits are the source of most of the money Tesla needs to keep Model 3 production afloat, according to David Keith, MIT Sloan School of Management professor.
“This is a critical juncture for Tesla,” Keith told the Seattle Times. “They need to convert 400,000 orders into 400,000 happy customers.”
Tesla rolled out its all-electric Model S sedan and Model X SUV first, and each has reached a modest production total of less than 100,000 cars a year. The company has promised to produce 500,000 new cars overall next year, most of which will be Model 3s.
The Model 3 will sell at $35,000—half the price of the Model S.