But Model 3 delays are costing it a fortune

Not until 2020 – comments by Musk on Tesla’s Shanghai factory hit suppliers’ and property stocksMore

The reallocation of resources to fix the facility's difficulties appears to be slowing down Autopilot, the Solar Roof, the Tesla Semi, and the Tesla Network.

Tesla (NASDAQ:TSLA) last released its quarterly earnings data on Wednesday, November 1st. The figure also surpassed the Zacks Consensus Estimate of $2.92 billion.

The losses were bigger than usual because Tesla has been focused on ramping up production of its Model 3 sedan.

Third-quarter vehicle deliveries, which were announced at the beginning of October, were up about 5% year over year and 19% sequentially.

Tesla said it had produced just 260 of the Model 3 cars in the third quarter, less than a fifth of the 1,500 vehicles it had planned to build. "However, we acknowledge that it is extremely hard to forecast with any reasonable degree of accuracy the true pace of progress of moving Model 3 from a position of severe bottleneck to free-flowing production".

Tesla delivered 26,137 vehicles in the third quarter of 2017. The Model 3 uses key cards and Tesla's smartphone app instead of a key, so in theory anyone could be granted access through an automated system.

Model 3 production is "steadily increasing".

Although Tesla has made leaps in the luxury vehicle biz, via its advanced technology and innovative design, everything is riding on its Model 3.

But they were more divided on Musk's assurances that the company was now on top of the Model 3 issues and well-capitalised for the extra investment needed to resolve them.

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Four modules are packaged into an aluminum case to form a Model 3 battery pack.

Several sources, as well as the trade site the Daily Kanban, have suggested that Tesla made a major mistake by installing the Model 3 assembly line before it had been fully tested by its designers.

Tesla burned through $1.4 billion in cash in the third quarter, according to data from Bloomberg.

For its fourth quarter, Tesla maintained its guidance to deliver about 27,000 combined Model S and X deliveries.

The company said: "Now that the foundation of the Tesla vision neural net is right, which was an exceptionally hard process.we expect a rapid rollout of additional functionality over the next several months and are progressing rapidly towards our goal of a coast-to-coast drive with no one touching the controls". This would bring total Model S and X deliveries in 2017 to about 100,000, up 30% compared to 2016.

"While we expect that increased Model 3 production will provide a meaningful injection of liquidity on a number of fronts, Tesla runs the risk of requiring financing over the next few quarters, particularly if Model 3 production continues to undershoot expectations", Nomura's Shah said in a note.

Energy generation and storage gross margin declined 368 bps sequentially in the quarter to 25.3%.

Based on the current position, Tesla expects to achieve a production rate of 5,000 Model 3 vehicles per week towards the end of the first quarter in 2018.

Between cash on hand, future cash flows and available lines of credit, we believe that we are well capitalized to accommodate the revised ramp of Model 3 production to 5,000 per week.

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