Tesla posted its third-quarter results today, revealing a healthy growth in deliveries for the Model S and X. However, the automaker also recorded a $2.92 loss per share, which was bigger than expected.
In the third quarter, Tesla delivered 25,915 copies of the Model S and Model X. With these numbers, deliveries jumped 18 percent globally compared to the second quarter of this year and 4.5 percent from the same quarter last year. Due to the increase in volume, Tesla’s automotive business, not accounting for the company’s energy storage sector, achieved a 10-percent growth in revenue compared to the same time last year.
Meanwhile, Tesla sold just 222 copies of the new Model 3 sedan. CEO Elon Musk has admitted the company is in “production hell” right now, but maintains there are no issues with its supply chain or production processes. Tesla says the car is not difficult to build, but adopting a highly automated manufacturing system has been challenging in the early stages.
“To date, our primary production constraint has been in the battery module assembly line at Gigafactory 1, where cells are packaged into modules. Four modules are packaged into an aluminum case to form a Model 3 battery pack. The combined complexity of module design and its automated manufacturing process has taken this line longer to ramp than expected,” Tesla said in its Q3 report.
Manufacturing system suppliers had worked on the four-zone process, but Tesla redesigned two of the zones to prepare for the Model 3. Despite the difficult changeover, Tesla says it is making “significant progress” every week in battling delays, and by late Q1 of next year, it tentatively expects to produce 5,000 Model 3 vehicles per week.
Tesla’s cash balance remains at $3.5 billion coming into the fourth quarter.
Tesla’s automotive growth margin dropped 18.7 percent due to an increase in manufacturing costs for the Model 3. As it delivers more Model 3 vehicles, which temporarily rake in lower margins, the automaker expects its overall automotive gross margin to decline in the fourth quarter of this year to around 15 percent before making a comeback in the first quarter of next year.
Source: Tesla, CNBC
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