Tesla Increases Its Losses by 83% in the First Three Months of 2016

The founder and chairman of Tesla, the billionaire Elon Musk revealed today that it has established July 1, 2017 as the date to start production of Model 3, but acknowledged that “it is impossible” to meet that goal because of its huge losses in the first quarter of 2016.

The “leak of the secret”, as defined by Musk himself, occurred in a conference call with analysts and media shortly after Tesla revealed it lost 282.2 million in the first quarter, 83% more than in the same period of 2015.

The increased losses came despite the increased in revenues of over $ 1.147 billion, 22% more than in the same period of 2015, due to production problems suffered by Tesla that forced it to deliver fewer vehicles than initially planned for the first three months.

Record of production

In that period of time, Tesla delivered 14,810 vehicles and produced 15,510 units, the highest figure in the short history of the company that produces pure electric luxury vehicles. Notably, of the 15,510 vehicles produced, 12,851 were from Model S and 2,659 were from Model X SUV. Tesla recognized that the figures of Model X “were insufficient to meet the projected delivery levels.”
As for the quarter that enters, Tesla expects to produce 20,000 vehicles and deliver about 17,000 due to “the large number of vehicles in transit to customers in Europe and Asia. Now that the limitations in the supply chain have been solved, we plan to finish the second quarter in a stable level of production of 2,000 vehicles a week, “said the chairman and chief executive of Tesla, Elon Musk.

During the 90 minutes conference call with analysts and the media, Musk dedicated a lot of time to specify that many of the production problems are being solved and will not be a problem when production starts with Model 3.

“The date is impossible”

On the hypothetical date of production, July 1, 2017, Musk said it was necessary to “force” providers to “start things already” but acknowledged immediately that “it is an impossible date” and it will be delayed a few months.

Read about Tesla Model Y ?

He also revealed that he has moved his office to be as close as possible to the production chain and ensure that the vehicles produced by Tesla have the highest possible quality, “My desk is at the end of the production chain. I’ve been sleeping in a sack on the floor of a nearby room, “said Musk to mark his commitment that Tesla be “the manufacturer of the highest quality in the world.”
“What we are trying to do is put the largest possible number of electric vehicles on the road. What is the problem? Product. We need to be the best manufacturer in the world. We are determined to get to that level,” Musk said. Although for this, Tesla needs to improve its production process for producing hundreds of thousands of vehicles per year, which is the stated aim of Musk especially if he wants the Model 3 to be a bestseller.

There are already 400,000 orders for the Model 3

So far, they have received about 400,000 purchase orders for Model 3, an electric vehicle Musk revealed a few weeks ago which will have a base price of $ 35,000. “Model 3 is Tesla’s first vehicle that has been designed to be easily produced,” said Musk, who also revealed that despite initial fears, the demand for the Model S has increased since announcing the launch of Model 3.

To conclude, Musk said Tesla will have to set up production plants in Europe and Asia to meet the anticipated demand for Model 3 in these regions: “There is no firm decision,” said Musk, “but it makes no sense to send cars to Europe or Asia in these volumes. “

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