Tesla Stock Punished by High Costs and Delayed Production

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Tesla Stock Punished by High Costs and Delayed Production

Musk must coordinate a sprawling supply and production chain, including two factories where cars are assembled in Fremont and the Gigafactory where Model 3 battery packs and drive units are made.

And the problems will continue.

Even worse for Tesla's fans: The automaker has pushed back its Model 3 manufacturing goals, now estimating that it won't ramp up production to the projected 5,000 vehicles per week until late in the first quarter in 2018, a full cycle later than originally planned. Because of delays at its battery facility in Nevada, Tesla said it now expects to make 20,000 Model 3s per month by the end of the first quarter.

Tesla reported a wider-than-expected third-quarter loss, the largest in its history.

As far as the company's earnings are concerned, Tesla posted an adjusted loss per share of $2.92 per share, significantly wider than the loss of $2.23 per share that Wall Street predicted. That was well below the $2.45 a share deficit that a consensus of industry analysts had forecast, according to Thomson Reuters.

Tesla had other significant expenses. Sanford C. Bernstein set a $265.00 target price on Tesla and gave the company a "neutral" rating in a research report on Wednesday, September 20th. The company opened 18 stores and service stations worldwide during the quarter, and set up 126 new Supercharger stations to try to prepare for the increase in demand from Model 3 buyers.

All in all, Tesla will reduce the production of these cars by 10% in the fourth quarter in order to reallocate these resources into improving its Model 3. Its revenue totaled $2.51 billion down -6.84% from the previous quarter.

Although Tesla has made inroads among luxury auto buyers with the advanced technology and innovative design in its Model S sedan and Model X SUV, it is the Model 3 on which its long-term viability rests. They have risen 45 percent since the start of this year. The company says it's on track to deliver 100,000 Model S and Model X vehicles in 2017, up 30 percent from 2016. Sustainable energy generation and storage is a critical part of Tesla's mission and will drive long-term revenue growth and profits.

The company also reported its biggest quarterly loss ever, below analysts' expectations, sending shares down almost 5 percent after hours after falling 3 percent in normal trade.

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