Model 3 is the biggest contributing factor.
The outlook is less than peachy for American automaker Tesla, with the seemingly-infallible company recording a whopping US$619-million ($805-million) loss over the third quarter of this year, citing continuing issues with the production of the compact Model 3 saloon as the main source of their financial troubles.
Getting the 3 to market has been described previously as nothing short of “production hell,” with various bottlenecks and quality issues cropping up, resulting in a much slower rollout of Tesla’s entry-level model than it expected. The company previously claimed that it would be capable of producing 5,000 units a week by now, with that target being pushed back to Q1 2018, and even then they’re being vague about the whole thing.
“While we continue to make significant progress each week in fixing Model 3 bottlenecks, the nature of manufacturing challenges during a ramp-up such as this makes it difficult to predict exactly how long it will take for all bottlenecks to be cleared or when new ones will appear.” — Tesla Inc.
The unusually realistic and hesitant language being used in the statement says a lot about the issues they’re facing, given the remarks the company and its chief executive, Elon Musk, have made in the past regarding the potential of the Model 3 and their ambitions to get the car on driveways faster than anyone else out there.
It’s not all bad news though, as the premium Model S and Model X, er, models are doing better than ever, and are well on their way of hitting their targeted 100,000 global deliveries by year end. Revenue has grown by a considerable 10% year-on-year, though continued investment into the production and refinement of the Model 3 means that losses are likely to continue until they manage to crawl through their problems, with healthier financial results expected once production picks up the pace.
While the Tesla Model 3 managed to rack up over half a million preorders in the months leading up to its introduction were nothing short of impressive, we can only imagine that its beleaguered production has resulted in a vacuum that is quickly being plugged by other contenders, who not only offer quicker delivery times, but less questionable quality and more versatile powertrains. With delays foreseen to continue for a little while, perhaps the BMW ad we’ve featured above is now that much more smug.
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