Tesla misses weekly Model 3 production target, flags tariff costs

Tesla misses weekly Model 3 production target, flags tariff costs

Tesla misses weekly Model 3 production target, flags tariff costs

The stock's somewhat muted reaction may be a reminder of the position in which Tesla now sits-just past a trying period in which CEO Elon Musk agreed to step aside as chairman to settle an SEC lawsuit, and ahead of its third quarter financial results.

The Model 3 sedan is key to the money-losing company's growth and profit plans and underpins its goal of eventually becoming a mass-production automaker.

However, Musk will remain as CEO of the company under the agreement made by the SEC.

The electric vehicle maker said it was speeding up construction of its Shanghai factory as it seeks to combat a huge competitive disadvantage against other producers and even other imported cars, which it said are carrying a lower 15 per cent tariff.

Tesla Inc. posted a surge in electric-car deliveries that could prove pivotal to earning an elusive profit, overcoming a series of distracting missteps by Chief Executive Officer Elon Musk.

Musk said in an email to employees on Saturday the company was "very close to achieving profitability" but for that it has to stabilize a brutal ramp-up in output whose targets it has consistently struggled to meet. He is staying on as CEO, but gives up his chairmanship.

Analysts hoped the deal, which enforces oversight of Musk's public communications, would put an end to several months of turmoil that has prevented investors from focusing on a business that churned out a reported 80,000 cars in the third quarter.

Lawyers said that the settlement and size of the fine might give more ammunition to short-sellers pursuing separate cases against Musk for manipulating the company's shares through the August 7 tweet, as well as to an investigation by the US Justice Department. "If we go all out tomorrow, we will achieve an epic victory beyond all expectations".

Analysts are expecting Tesla to report a third-quarter loss of about $200 million, according to FactSet. During those three months, it built a total of 80,142 electric vehicles, of which 53,239 were the somewhat more affordable Model 3.

53,239 Model 3 vehicles, which was in line with our guidance and nearly double the volume of Q2.

But customers have been complaining that their Tesla delivery dates have been delayed over and over while vehicles sit unmoved in lots.

Musk tweeted back and acknowledged the problem: "Sorry, we've gone from production hell to delivery logistics hell, but this problem is far more tractable".

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