In its efforts to get more Model 3s out the door, Tesla has incurred massive losses in its worst financial quarter to date.
Tesla has had to concede defeat to its goal of having 10,000 Model 3 electric vehicles (EVs) produced every week following a financial quarter it would like to forget.
In its latest Q3 financial statement for 2017, the company said it made a loss of $619m, making this quarter its worst so far financially, thanks in part to what founder and CEO Elon Musk described as “production hell” at its Gigafactory plant.
Btw, just want to express a word of appreciation for the hard work of the Tesla Gigafactory team. Reason I camped on the roof was because it was less time than driving to a hotel room in Reno. Production hell, ~8th circle …
— Elon Musk (@elonmusk) October 26, 2017
This has resulted in Tesla’s shares taking a tumble by 5pc in after-hours trading, which isn’t helped by the fact that these losses are double what it had just one quarter ago, according to The Verge.
Much of Tesla’s future success is pinned on the production of its more affordable Model 3 cars but, as of last month, only 260 had actually rolled off the manufacturing line since its official launch this summer.
In a statement, the company said: “While we continue to make significant progress each week in fixing Model 3 bottlenecks, the nature of manufacturing challenges during a ramp such as this makes it difficult to predict exactly how long it will take for all bottlenecks to be cleared or when new ones will appear.”
Aiming for 5,000 Model 3s per week
In a follow-up call to investors, Tesla’s management confirmed its decision to abandon plans for 10,000 Model 3s per week and said it won’t be making any such claims until it can guarantee at least 5,000 per week.
Such production bottlenecks have not been specified by Tesla, but complaints from staff within the factory have claimed that the hold-up is not helped by the fact that parts of the car are being built by hand, with other claims citing miscommunication from management to staff.
The company’s HR department has also been quite busy lately with a labour complaint being filed by the United Automobile Workers union, which alleged that staff were fired for unjust reasons.
Complaints have also been raised after Tesla’s energy subsidiary SolarCity announced that it was to lay off hundreds of staff in what the company claimed was simply a matter of performance review, adding that the employees would be encouraged to move to other roles in the company. However, some members of staff claimed that they hadn’t received a performance review since Tesla took over the business just under a year ago.