Tesla misses first major Model 3 goal in worst financial quarter ever

What Wall Street wants to know about Tesla's Model 3

The EV automaker adds that it now expects to achieve a production rate of 5K Model 3 vehicles per week by late in the first quarter of 2018.

Tesla's stock fell by as much as 5% in extended trading after the earnings release.

For weeks now, many have wondered whether Tesla had solved the production challenges hampering the rollout of the Model 3, the company's first mass-market vehicle.

Tesla said in its third-quarter earnings letter that it's still hard to assess when it will sort out the "bottlenecks" that delayed Model 3 production in the third quarter.

The Model 3, seen as Tesla's best long-term hope, is priced at about $35,000, about half the price of its high-end Model S vehicle.

More than 450,000 people are on the Model 3 waiting list and Tesla is under pressure to deliver, having fallen behind its own production targets and making just 260 cars last quarter.

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Tesla said its primary production constraint has been at the battery module assembly line at its Gigafactory in Sparks, Nevada.

FILE PHOTO: A Tesla charging station is seen in Salt Lake City, Utah, U.S. on September 28, 2017.

The company said it has a cash balance of $3.5 billion entering the fourth quarter. It surged 51% this year through Wednesday's close, and its market cap at some point surpassed that of older rivals including Ford, Fiat Chrysler, and General Motors.

Tesla CEO Elon Musk had promised that the Model 3, which has more than 500,000 potential buyers on its waiting list, would be simpler to make than Tesla's previous vehicles and not plagued with the same delays. "Many Model 3 customers put deposits down on the vehicle more than a year ago before they even saw the vehicle, so it's clear Tesla buyers don't follow the usual logic-driven auto buying process".

Analysts expect the stock market glamor stock to post a quarterly loss of US$2.28 a share on revenue of US$2.9bn. Revenue rose 2% to $16.10 billion, beating the FactSet consensus of $15.52 billion, as 9% growth in premiums, fees and other revenue offset a 7% drop in net investment income. Finally, Vetr upgraded shares of Tesla from a strong sell rating to a sell rating and set a $320.97 price objective for the company in a research note on Friday, October 13th. The stock sank -2.93% last month and is up 55.15 this year.

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