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Tesla doubles quarterly loss at $619 MILLION, Model 3 batteries are the bottleneck

Tesla doubles quarterly loss at $619 MILLION, Model 3 batteries are the bottleneck

Tesla-Motors-logo Yesterday, Tesla posted a quarterly net loss of $619 million dollars. But, Tesla always loses money right? So let's throw some context in there. (SEC Filing)

Here are the net earnings for the prior 5 quarters.

 

Quarter Net Earnings
3 months ending 2017-9-30 -$619,376,000
3 months ending 2017-06-30 -$336,400,000
3 months ending 2017-03-31 -$330,280,000
3 months ending 2016-12-31 -$121,340,000
3 months ending 2016-09-30 $21,880,000
3 months ending 2016-06-30 -$293,190,000

Earnings History From: Google

billion

That said, Tesla also has $3.5 billion dollars in the bank. So they could do this for another 5 to 7 quarters before going bust or let's face it, look for more investment.

Model 3 Bottleneck

Tesla also reported that the "current" model 3 production bottleneck is building the batteries at the gigafactory.

To date, our primary production constraint has been in the battery module assembly line at Gigafactory 1, where cells are packaged into modules.  Four modules are packaged into an aluminum case to form a Model 3 battery pack.

They also, mentioned that they have run into a series of issues and it's hard to say how long or how significant the next bottle neck could be.

What does the market think?

Well...have a look.

Screen Shot 2017-11-02 at 5.53.30 AM.png

Down 5.94% in the off hours. I'm curious how the market will play out today. While the $619 million loss is a big deal, it's not yet a stake in the heart of Tesla. If they can achieve a production rate of 10,000 Model 3's per week soon, they could come back extremely strong.

I'm not buying on the dip though. Tesla also reported they want to hit 5,000 units a week by Q1 2018. With over 500,000 Model 3 orders, that means you won't get one if you order now, for about 2 years or 2019.  Other manufacturers Ford, Volvo, Porsche, Chevrolet, etc...have fully electric vehicles coming that may give Tesla a run for its money around that time as well.

Disclaimer: I do not have and holdings in TSLA at the time of writing this article.

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