The new production schedule wipes out the company’s previously stated forecast of turning a profit based on generally accepted accounting principles, or GAAP, by the fourth quarter and increases the likelihood Tesla will need to raise more money sooner. That loss came on the heels of a 7% gain late Wednesday after the electric-car maker reported a narrower-than-expected first-quarter adjusted loss and quarterly sales in line with Wall Street expectations. The factory produced 50,000 vehicles a year ago.
Advertisement
Tesla Motors CEO Elon Musk has unveiled a production target that could be considered a very ambitious one, even for the visionary CEO and his electric auto company. He also said the majority of the engineering on Model 3 is completed, and that the cars present at the launch on March 31 had production drivetrains.
Musk’s company reported its first quarter results on Monday, and while it logged a net loss for the beginning of 2016, experts say that such growing pains are to be expected, and that Tesla’s cars are “close to flawless”.
Tesla would also be tougher on suppliers who can not meet its deadlines, he said. Company officials have always referred to the Fremont plant’s total capacity to be around 500,000 cars per year once optimized, which is what Toyota and GM were producing when they owned the factory, until now.
No small undertaking, the massive scale-up would see Tesla produce almost five-times more vehicles per year than it has produced in its entire history beginning in jut two years.
However, that doesn’t mean some customers won’t have to wait for their vehicle to be delivered. An unnamed source told Bloomberg the changes were due to the messy Model X production, although a company spokesperson denied the report. That number will include the Model 3, due in late 2017 with a sticker price starting at $35,000. After it saw thunderstorm of Model 3 reservation, the company chose to achieve the goal by 2018 via the new Build Plan. However, it was still a 48 percent increase in deliveries over the same period past year.
Tesla, which produced a record 15,510 vehicles in the 2016 first quarter, expects to produce 20,000 this quarter and another 50,000 in the second half of the year.
Advertisement
The company said Model X prices – which start at about US$80,000 – were about 30 percent higher than for the Model S.
