Tesla shares are sliding ahead of Thursday's opening bell, down 5.44% at $300, after the company reported fourth-quarter Model 3 deliveries that missed estimates by a mile. Tesla didn't come close to achieving an initial goal to manufacture that many sedans a week by the end of previous year.
Tesla shares were down 3 percent Thursday morning.
"As a result of the significant growth in our production rate, we made as many Model 3's since December 9 as we did in the more than four months of Model 3 production up to that point", Tesla said, explaining that this is why it wasn't able to deliver many of these cars during the holiday season, just before the quarter ended. "While Tesla's repeated guidance revisions could begin to risk damaging its elite brand, a mass-recall would probably be far more damaging", he noted.
However, the delays intensify the rate at which Tesla is burning cash-US$1.1 billion in the third quarter and about the same estimated for the last quarter of 2017-and worrying investors, who have yet to see a profit from Tesla.
As a result, now that owners have their cars and can do what they want with them, some of them are trying to make a little side cash on Turo, a website where owners can rent their cars out for a daily fee.
"Given that TSLA received over 400k Model 3 reservations with essentially no marketing, we believe potential demand for the vehicle is likely underestimated, and think TSLA could significantly increase demand through its own advertising in the future", Baird Equity Research analyst Ben Kallo said. Tesla reported it delivered 101,312 Model S and X vehicles in 2017, a 33% increase over 2016. So was Jonas rending garments when Tesla announced that instead of making 5,000 Model 3s every week, the company made 1,550 apparently bespoke Model 3s in three months?
Slow production could affect the number of Model 3 buyers who receive the $7,500 federal electric vehicle tax credit, and it is unclear whether this may drive away buyers, said Cowen analyst Jeffrey Osborne.
Still, it was able to complete the cross-country journey in just 50 hours, using $100 to charge their Model 3 in that time.
Tesla shares gained 45% in 2017. During the last week of December, the company said, it made 793 Model 3s.
The more gradual ramp is so the company can "focus on quality and efficiency rather than simply pushing for the highest possible volume in the shortest period of time", according to the release. But Tesla has skipped many incremental steps used by established carmakers when launching new products. These will be counted as deliveries in Q1 2018, Tesla said.