Shares in electric car maker Tesla have dropped after the company’s third-quarter earnings release. The company reported total revenues of $2.98 billion in the quarter and net loss of $671.1 million.
Tesla stock was down $10.45 to close at $321.08 in regular trading. After-hours, the stock dropped another $15.48 to $305.60.
In the third quarter, Tesla delivered 25,915 Model S and Model X vehicles and 222 Model 3
vehicles, for a total of 26,137 deliveries. Combined Model S and Model X deliveries in Q3 grew 18% globally compared to Q2 and 4.5% versus the same quarter one year ago.
Tesla said it delivered its 250,000th vehicle in the quarter and has $3.5 billion in cash available going into the fourth quarter. The company expects to spend $1 billion in the fourth quarter on production as well as expanding stores and its supercharger network.
The company cited problems with production for its new Model S sedan. The primary bottleneck the company is facing is the battery module assembly line at Gigafactory 1 in Nevada, where cells are packaged into modules. Four modules are packaged into an aluminum case to form a Model 3 battery pack.
The combined complexity of module design and its automated manufacturing process has taken this line longer to ramp than expected. According to Tesla, the biggest challenge is that the first two zones of a four zone process, key elements of which were done by manufacturing systems suppliers, had to be taken over and significantly redesigned. The company has redirected its best engineering talent to fine-tune the automated processes and related robotic programming. Tesla hopes to ramp up Model 3 production to 5,000 vehicles per week.