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February 8, 2018

OUCH: Tesla reports record loss in fourth quarter; Model 3 production still lagging.

Noting that the losses were the result of production costs on the Model 3, Efraim Levy of CFRA said, “The Model 3 production is the key to getting on a sustainable cash flow level. Once they get to correct levels, they will turn profitable.”

It might be awhile.

In a shareholder letter signed by Chief Executive Elon Musk and Chief Financial Officer Deepak Ahuja, Tesla also once again applied the brakes to delivery expectations for the Model 3, the company’s heralded lower-cost electric car.

The new Model 3 — see our recent review of the car here — has been touted as an affordable battery electric vehicle, with a base MSRP of $35,000. More than 450,000 hopeful consumers placed refundable $1,000 deposits to claim them when Tesla first began taking orders in early 2016.

Crucial to the company’s success, the car has suffered significant delays in getting up to production speed and in getting to consumers.

Tesla on Wednesday advised that production rates of the Model 3 could be 2,500 cars a week by the end of March and 5,000 cars a week at the end of June. Last fall, the company had said it would be producing 5,000 cars a week by the end of 2017.
Analysts expressed skepticism about Tesla’s ability to meet those numbers.

Eventually, customers are going to expect to take delivery of their cars — or of refund checks for their deposits.