Tesla CEO Elon Musk Says $35000 Model 3 Production Ramping up

Kelley Robertson
May 3, 2018

"That's our focus right now".

Tesla said it produced 2,270 Model 3s per week in the last week of April, up from 2,250 in the second week of the month. Chief Executive Elon Musk acknowledged error recently in over-automating the Model 3 assembly-line, but it is still unclear how long and costly it will be to unwind this mistake. He then allowed multiple questions from a person via YouTube.

Tesla's cash balance dropped but the US-based electric vehicle automaker ended with $2.7 billion in cash.

Tesla CEO, Elon Musk has confirmed that the company's next vehicle, the Tesla Model Y, won't go into production until early 2020. The company's revenue for the quarter was up 26.4% compared to the same quarter past year. Tesla is also retrenching from its automation efforts for now.

Tesla did not break out a cash flow calculation as it has in previous quarters.

Tesla said gross margins on the Model 3, which today are slightly negative, would be close to flat in the second quarter and grow to "highly positive" in the second half of the year. After it is able to hit that mark, its next goal is to build 10,000 Model 3 vehicle per week.

Ever since the company's first "affordable" Model 3 rolled off the production line a year ago the company has been struggling to produce the vehicle quick enough.

Tesla's future depends on the Model 3 and the company said that it had largely overcome production bottlenecks, with Musk vowing a dramatic turnaround that would reverse losses and generate positive cash flow in just a few months.

The Model 3 starts at $US35,000 but can easily top $US50,000 with options.

"In particular the number of third-party companies we're using has gotten out of control. Fundamentally, we believe that thinking about a factory in the same way that people think about the product itself creates the potential for a step change in manufacturing that will create enormous benefits for quality, cost, efficiency and employee safety", the company said.

"Yes, excessive automation at Tesla was a mistake".

"We have temporarily dialed back automation and introduced certain semi-automated or manual processes while we work to eventually have full automation take back over", the company said.

In releasing its quarterly earnings, Tesla reported another massive, though expected loss.

The giant loss in a critical quarter for the 15-year-old company fell short of Wall Street estimates.

According to TechCrunch, analysts expected the company to have a report of $3.22 billion Dollars revenue with stock losses at $3.48 per share. Revenue, however, exceeded estimates of $3.28bn. (NASDAQ:TSLA) will announce sales of $3.25 billion for the current fiscal quarter, Zacks reports.

Shares fell 5% - about £1.8bn - in after-hours trading in the seconds after the electric vehicle company chief dismissed Bernstein analyst Tony Sacconaghi's question about capital requirements. Nomura restated a "buy" rating and set a $420.00 price objective on shares of Tesla in a research report on Thursday, March 29th. At the end of past year the company had a total of $9.5bn in long-term debt. As Tesla has increased spending in the last two years, the company has issued billions in debt and equity to keep pace.

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