Tesla Inc. on Wednesday pushed back its target for volume production on its new Model 3 sedan by about three months, saying that while progress fixing bottlenecks was made, it was difficult to predict how long it would take for all production issues to be fixed.
The company also reported its biggest quarterly loss ever, below analysts' expectations, sending shares down nearly 5 per cent after hours after falling 3 per cent in normal trade.
Tesla, led by Silicon Valley entrepreneur Elon Musk, said it now expects to build 5,000 Model 3s per week by late in the first quarter of 2018 from its original target date of December.
Battery production issue
Tesla said the main constraint it currently faced was within its battery module assembly line, where the company had to redesign part of the production process.
Money-losing Tesla's long-term viability depends on the Model 3, its new sedan that starts at $35,000, about half the price of its flagship Model S.
The niche carmaker has made inroads among luxury car buyers with the advanced technology and innovative design in its Model S sedan and Model X SUV. Tesla plans to produce 500,000 vehicles in 2018, mostly Model 3s, a six-fold increase over 2016 levels.
But the Palo Alto, California-based company made just 260 Model 3 sedans in the third quarter due to "production bottlenecks," it said. It had planned to build more than 1,500.
Model 3 production delays mean postponed sales and exacerbate the company's cash burn, made worse as Tesla pays to fix current manufacturing issues. The problems could also worry the over 500,000 customers who have put down a refundable deposit on the car.
Tesla posted a net loss of $619.4 million US, or $3.70 per share, for the third quarter ended Sept. 30 compared with a profit of $21.9 million US, or 14 cents per share, a year earlier.
Revenue rose 30 per cent to $2.98 billion US. Excluding items, the company lost $2.92 per share.
The company said it had $3.53 billion US in cash and cash-equivalents as of Sept. 30, compared with $3.04 billion US at the end of the second quarter.
Last month, Tesla reported it delivered 26,150 vehicles in the third quarter, a 4.5 per cent rise on the same period of 2016, but added that "production bottlenecks" had left the company behind its planned ramp-up for the $35,000 US Model 3.