Tesla Share Prices Takes A Hit After Another Model 3 Delay

Posted January 06, 2018

Tesla didn't come close to achieving an initial goal to manufacture that numerous sedans a week by the end of 2017. That end-of-the-quarter rate extrapolates to "over 1,000 Model 3s per week", according to Tesla. The carmaker has been blowing through more than $1 billion a quarter as it's had trouble scaling up output despite spending heavily on robots, assembly lines and tooling for the sedan that is Musk's cheapest yet, starting at $35,000.

RBC Capital Markets analyst Joseph Spak wrote in a note that he did not believe Tesla will be required to do a capital raise.

At the time of publication, Tesla shares had dropped 2.01 percent in after-hours trading to $310.10 per share. The stock climbed 46 per cent in 2017 and the company ended the year with a US$52.3b market capitalization, placing it ahead of Ford and behind General Motors. As we've talked about before, Jonas' approach to monitoring Tesla reminds us of a parole officer who falls in love with their parolee.

The company burned through $1.1 billion in capital expenditures in its third quarter and said in November that fourth-quarter capex would also be about $1.1 billion.

Tesla announced delivery and production numbers for the fourth quarter of 2017 on Wednesday.

Nonetheless, Tesla reported that it delivered 1,550 Model 3s in Q4 2017. Sales of those more expensive models jumped 33 per cent from 2016. "Looks like we can reach 20,000 Model 3 cars per month in Dec", Musk tweeted back in January.

But late past year, Tesla said it planned to hit that 5,000-car-per-week production rate by "late Q1".

The company has said more than 400,000 people have put down $1,000 refundable deposits on the Model 3. Shares have been under pressure lately but still give the company a market value of about $53 billion, analysts say.

In a statement Wednesday, Tesla thanked customers "who continue to stick by us while patiently waiting for their cars".

For the entire past year, the shares of the NASDAQ-listed electric vehicle maker rose 45.70% following a 10.97% slump in 2016. "Once you have it right you can ramp really quickly, but getting to that phase is the hard part".

The prices we've seen range from a premium $196/day here in Orange County CA where Teslas are quite popular, to a silly $990/day in the SF Bay Area where Teslas are even more popular. During the last week of December, the company said, it made 793 Model 3s.

Tesla said on Wednesday it would likely build about 2,500 Model 3s per week by the end of the first quarter, half the number it had earlier promised. But Tesla has skipped many incremental steps used by established carmakers when launching new products.