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Tesla Model 3 deliveries fall short, production target delayed again

Tesla Model 3 deliveries fall short, production target delayed again

In other words, Tesla appears to be now producing the Model 3 at a pace is well of the pace implied in our earnings model. Tesla didn't come close to achieving an initial goal to manufacture that numerous sedans a week by the end of 2017.

Tesla shares were down 3 percent Thursday morning.

Chief Financial Officer Deepak Ahuja had reassured investors that cash flow would "improve significantly" over the next few quarters as Tesla continued to ramp up Model 3 production.

Tesla's announcement "isn't much of a surprise" because of the automaker's previously known Model 3 production problems, but if the bottlenecks continue they could cause Tesla serious problems, said Jessica Caldwell, executive director of industry analysis at Edmunds.com.

"We believe a fundraise will be necessary for Tesla in 2018", wrote Brian Johnson, an analyst at Barclays Plc, in a report to clients Thursday. Tesla produced 2,425 sedans during the period.

The company burned through $1.1 billion in cash in that quarter and said in November it would spend roughly the same amount in the fourth quarter. The company will likely end the first quarter at a weekly rate of about 2,500 Model 3 vehicles. "We have them hovering about $1 billion in cash".

Tesla delivered a record-breaking 29,870 vehicles in the fourth quarter of 2017, of which 15,200 were Model S, 13,120 Model X, but just 1,550 were the cheaper "mass-market" Model 3s ($35,000?29,000). Critics point out that the company's unprecedented rush to ramp up production puts it at risk of delays and costly recalls if quality issues arise.




The Elon Musk-led company now expects to assemble 5000 Model 3s a week by the end of June, delaying plans to reach that milestone by another three months.

The estimates for Model 3 deliveries by different brokerages varied widely. Pre-orders for the Model 3 were through the roof after the company announced the launch, reaching over half a million by July 2017-a year after the announcement.

Tesla's bonds due in 2025 were quoted at 94.9 cents at 8:30 a.m., according to Trace bond price data, the lowest in about a month.

Still, it was able to complete the cross-country journey in just 50 hours, using $100 to charge their Model 3 in that time.

Tesla said 860 Model 3 vehicles were in transit to customers at the end of the fourth quarter. But Tesla has skipped many incremental steps used by established carmakers when launching new products.

"Tesla has really lofty goals for automation", said Tasha Keeney, an analyst at ARK Investment Management, which holds Tesla shares.


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