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Tesla posts record quarterly loss

November 2, 2017

Silicon Valley entrepreneur Elon Musk's Tesla company keeps facing a crucial test in its growth strategy as it ramps up its e-car production. But bottlenecks at its battery factory have caused a record loss.

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Tesla Model 3s
Image: Reuters/Tesla

Tesla reported its largest quarterly loss ever of $619 million (€530 million), sending shares down by 5 percent after trading hours as analysts looked gravely disappointed.

The carmaker pushed back its target for volume production of its new Model 3 sedan by about three months, saying it was difficult to predict how long it would take to fix all bottlenecks.

The company noted the main constraint was its battery module assembly line at its Nevada Gigafactory where Tesla had to redesign part of the production process.

Tesla now expects to build 5,000 Model 3s per week by late in the first quarter of next year, away from the original target date of December 2017.

Tesla shares rally amid new model deliveries

Problems resolved?

"I was really depressed about three or four weeks ago," CEO Elon Musk told reporters, adding that he was now optimistic as there was clarity what needed to be done. "We're on it, we've got it covered."

Tesla could face major new requirements for cash given its Model 3 problems, a possible factory in China and plans to develop other vehicles, including an electric heavy-duty truck.

Shares of the company have fallen by almost 17 percent from a 12-month high in September, but are still up 50 percent from January fueled by investors' belief in the long-term prospects of the firm.

hg/jd (Reuters, AP)