Tesla hits production targets, but… – The Wall Street Journal

DUBLIN – Tesla had some good news for investors this week – it successfully hit its Q3 production targets, building over 53,000 Model 3s in the three months to end-September. However, it wasn't all good news. The company only managed to hit its 5,000 Model 3s a week goal for a single week back in June. That's the level Elon Musk says is necessary for the Model 3 line to hit a profit. It also still hasn't produced any of its promised $35,000 Model 3s – the cheapest available option is $49,000 and they have reportedly been selling for an average of $59,000. The company also reported some delivery bottlenecks. As I'm writing this, Tesla shares are down around 1.5% from yesterday's close, suggesting that the production report didn't meet the expectations of all investors. – Felicity Duncan.Tesla Meets Model 3 Production Goal, but Struggles With Deliveries.By Tim Higgins.(The Wall Street Journal) Tesla Inc. met its third-quarter production goal for its Model 3 sedan but struggled to get the cars to customers, underscoring the operational challenges ahead for Chief Executive Elon Musk and his electric-car company..___STEADY_PAYWALL___.The company Tuesday said it made 53,239 Model 3s during the three-month period, up from 28,578 in the second quarter. Mr Musk on Aug. 1 forecast the company would make 50,000 to 55,000 Model 3s during the third quarter..Tesla delivered 55,849 Model 3s during the period, slightly above the latest analyst consensus forecast of 55,600, which was lowered recently from 56,000 ahead of the auto maker releasing its figures. Tesla had previously said 11,166 Model 3s were in transit at the end of the second quarter that would arrive in third-quarter results..Model S sedan sales rose to 14,470 from 14,065 a year earlier, while Model X sport-utility vehicle deliveries rose to 13,190 from 11,865. Sales during the third quarter totaled 83,500, compared with 26,150 a year earlier and exceeded analysts estimates of 80,000 for the period..The quarterly results come days after Mr Musk settled a securities-fraud lawsuit that had threatened his future with the company. With that lawsuit out of the way, attention is turning back to Tesla's ambitious effort to become consistently profitable and transform into a mainstream auto maker..Tesla shares were down 0.1% at $310.32 in early trading..The surge in Model 3 sales is key to Mr Musk's plans to turn a profit in the third quarter..Tesla is betting the Model 3 will become its first mass-market vehicle after proving it could build a global luxury brand of electric cars with its higher-end Model S and Model X vehicles. Mr Musk had once pledged to deliver a total of 500,000 vehicles this year with a high-tech assembly process designed for mass production..Tesla instead struggled with its production line and repeatedly missed goals, and it has yet to sell any Model 3 cars at its long-promised price of $35,000, instead offering the cheapest version for $49,000..The company finally demonstrated an ability to make 5,000 Model 3s in a seven-day stretch during the final week of June, a pace that Mr Musk has said the company must consistently reach to generate enough cash to avoid raising new capital..During the third quarter, Tesla averaged making about 4,000 Model 3s a week. In the final week of the quarter, Tesla said, it produced more than 5,300 Model 3s..The results show that Tesla has improved the weekly build rate of Model 3s but still hasn't reached a consistent rate of 5,000 a week. The auto maker had said it aimed to reach 6,000 in a week by the end of August..Aside from production, Tesla is facing a new set of challenges associated with moving into the mainstream. While Tesla's Fremont, Calif., factory is churning out cars, the company is struggling to put them into customer hands..Mr Musk acknowledged as much on Twitter in September, saying Tesla was running short on trailers to deliver cars and was building its own carrier cars to help alleviate the situation..Tesla owners, eager to help, volunteered to help at company stores with customers coming to pick up their vehicles during the end-of-the-quarter rush..The unorthodox efforts underscore how Tesla, despite a market value that rivals General Motors Co., is still in its early days. The challenge for Tesla will be maintaining its breakneck pace going forward..Tesla said delivery and outbound logistics were the company's main challenges during the third quarter.."We made many improvements to these processes throughout the quarter and plan to make further improvements in Q4 so that we can scale successfully," the company said in a statement..Tesla had 8,048 Model 3s in transit at the end of the quarter that count as deliveries in the fourth quarter..The third quarter was tumultuous for Tesla as Mr Musk made several self-inflicted missteps, many of them on Twitter. He was sued for defamation after suggesting in tweets that one of the men who helped in the rescue effort of the boys soccer team in Thailand was a pedophile..On Aug. 7, Mr Musk shocked Wall Street by announcing on Twitter he had secured funding for a proposal to take the Tesla private. Seventeen days later he stunned investors again by announcing he was backing away from the effort..The Securities and Exchange Commission filed a lawsuit last week claiming he misled investors with his tweets. The Justice Department also was investigating..Mr Musk settled with the SEC over the weekend, giving up his chairman role while Tesla agreed to add two new independent directors to the board and put in place stronger governance over Mr Musk's communications. Mr Musk gets to remain chief executive and retain his board seat..The settlement with the SEC reduces the chance criminal prosecutors will go after the executive, according to former prosecutors and other criminal-law experts..Write to Tim Higgins at Tim.Higgins@WSJ.com

Tesla hits production targets, but… – The Wall Street Journal

Tesla Meets Model 3 Production Goal, but Struggles With Deliveries

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