Tesla gives wishy-washy outlook for Model 3 production issues

Tesla gives wishy-washy outlook for Model 3 production issues”

Tesla's shares dropped about 5 percent to $305.31 in after-hours trading Wednesday.

Tesla has pushed back its target for its new Model 3 vehicle by around three months, saying it did not correctly predict how long it would take to fix bottlenecks in its production line.

The first made-in-China Tesla could arrive in three years. At least one lawsuit has been filed by investors.

It only produced 260 Model 3 sedans in the third quarter, widely missing its target to manufacture 1,500 vehicles in September only.

"We'll have more to say on the hardware front soon, we're just not ready to say that now", Musk said. "We are on it, we've got it covered", but it will take a few months longer than expected, he said.

The company now expects to be building 5,000 Model 3s each week by late in the first quarter of 2018 - from its original target date of December.

Tesla, which rarely turns a profit, posted a net loss of $619 million for the quarter. At the time, Tesla denied the report.

"Every vehicle manufacturing line in the world has both manual and automated processes", said the company's Tuesday statement.

Production issues have been par for the course at Tesla practically since Day 1.

Model 3 production delays mean postponed sales could exacerbate the company's cash burn.

"The Model 3 production process will be vastly more automated than the production process of Model S, Model X or nearly any other vehicle on the market today, and bringing this level of automation online is simply challenging in the early stages of the ramp", Tesla said.

With a simpler, streamlined designed, the Model 3 was created to make the manufacturing process easier. "We were at level 9", Musk said, referring to how bad things were on a 1-to-10 scale. "It's really the only way to make the cars affordable in China", said Musk. Tesla said there are no issues with its supply chain. Its shares are up more than 50% so far in 2017.

"For the skeptics out there, ask them, which one of them predicted that Tesla would go from 2,500 units delivered to 250,000 units now?"

Elon Musk had some thoughts to share on Tesla's Q3 earnings call regarding full autonomy and how the automaker is preparing to deliver this to customers down the road. The company announced that its new vehicles had all the hardware on board they needed to achieve full autonomy past year, and offers customers the options to buy an upgrade that would deliver autonomy via software update once it was available.

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