Tesla swings to $671m loss on Model 3 delays

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Tesla will no longer reach its long-stated goal of producing 5,000 Model 3 cars per week in 2017, pushing that deadline back amid production hiccups and a massive $619 million quarterly loss.

Tesla's first mass market auto has been beset with manufacturing issues - and there' s no end in sight.

"Don't miss the "forest" for the trees when considering near-term Model 3 production constraints ..." But Tesla produced just 220 Model 3s in the third quarter, far lower than the 1,500 Musk promised.

And the problems will continue.

"Tesla is learning what traditional automakers have long known — mass vehicle assembly is complicated and expensive", said Michelle Krebs, a senior analyst at Autotrader.com.

Tesla reported a net loss of about $619.4 million, or $3.70 per share, compared to a net income of almost $21.9 million, or 14 cents a share, a year ago.

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Among investor worries: The Wall Street Journal reported on October 6, citing unnamed sources, that "as recently as early September major portions of the Model 3" were being built by hand. The company has more than 400,000 advanced reservations, but has been struggling to boost production after falling into what CEO Elon Musk has dubbed "production hell". The company opened 18 stores and service stations worldwide during the quarter, and set up 126 new Supercharger stations to try to prepare for the increase in demand from Model 3 buyers.

Tesla will also make 10% fewer units of the Model S sedan and Model X crossover in the fourth quarter to reallocate manufacturing resources to the sputtering Model 3. Revenue rose 2% to $16.10 billion, beating the FactSet consensus of $15.52 billion, as 9% growth in premiums, fees and other revenue offset a 7% drop in net investment income.

Tesla, Inc, formerly Tesla Motors, Inc, designs, develops, manufactures and sells fully electric vehicles, and energy storage systems, as well as installs, operates and maintains solar and energy storage products.

Tesla's shares fell 3 percent to close at $321.08 Wednesday.

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. The shares have risen 45 percent since the start of this year.

During Q3, we received record net orders for Model S and Model X, setting the stage for what should be an all-time record for deliveries of these vehicles in Q4. Energy generation and storage accounted for 11 percent of Tesla's third quarter revenue.

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