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Tesla slides through Q4 keeping 2,500 Model 3 cars/week production by Q1 end target

  • by Ulancer Contributor
  • In News
  • — 7 Feb, 2018


Tesla CEO Elon Musk managed to send his Tesla Roadster into space, because why not, earlier this week — and it looks like his week (and Tesla’s) is still looking up for now following the company’s fourth-quarter results.

The company slightly beat Wall Street’s expectations on the financial front, and said it’s still targeting producing 2,500 Model 3 vehicles by the end of the first quarter. Tesla previously stated this target, but as it starts to ramp up a new vehicle that’s geared toward a larger market, it’s had to deal with the production headaches that come with that. The company still said that it’s not an exact science regarding that target, but it didn’t seem to tune down the expectations, and the stock was slightly up as a result. What’s probably more important is that it’s not spiraling downward (yet), which means Wall Street at first blush is alright with what it sees and is going to continue to be patient with the company.

“We continue to target weekly Model 3 production rates of 2,500 by the end of Q1 and 5,000 by the end of Q2,” Tesla said in its statement. “It is important to note that while these are the levels we are focused on hitting and we have plans in place to achieve them, our prior experience on the Model 3 ramp has demonstrated the difficulty of accurately forecasting specific production rates at specific points in time. What we can say with confidence is that we are taking many actions to systematically address bottlenecks and add capacity in places like the battery module line where we have experienced constraints, and these actions should result in our production rate significantly increasing during the rest of Q1 and through Q2.”

Tesla also said that despite delays, net reservations for the Model 3 remained stable. As Tesla starts rolling out plans for new vehicles and tries to ramp that up, reservations are a big part of that equation as a gauge for demand and how the company is going to continue to operate with its tremendous cash burn. That the stock hasn’t taken a significant hit (and is actually slightly up following the report) signals the limited red flags in the company’s report — which is going to be a challenging one as it’s in a heavy ramp phase.

The company reported a loss of $3.04 per share on revenue of $3.29 billion. Analysts on Wall Street set targets of a loss of $3.16 per share on revenue of $3.28B for the fourth quarter this year. That narrower-than-expected loss is a good sign for Tesla as it tries to get its new cars out the door that are critical to its future success.

Tesla has often times been gauged on its production output as Wall Street looks for signs that it can deliver on the promise of ramping up production for its more mass-market electric vehicle, the Model 3. The company in January said it produced 2,425 Model 3 vehicles in the fourth quarter, and wants to make around 2,500 cars every week by the end of Q1 this year.

Featured Image: Darrell Etherington


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