Tesla Reports Its Largest Quarterly Loss in Q3 Earnings Report

Tesla Inc (TSLA.O) on Wednesday pushed back its target for volume production on its new Model 3 sedan by about three months, saying it was hard to predict how long it would take to fix all production bottlenecks.

The company will also be reducing production of its luxury vehicles, the Model S and Model X, to reallocate those resources to the Model 3.

Model 3 production delays mean postponed sales could exacerbate the company's cash burn, which Tesla estimated at $1 billion in the upcoming quarter.

Last month, Tesla reported it delivered 26,150 vehicles in the third quarter, a 4.5 percent rise on the same period of 2016, but added that "production bottlenecks" had left the company behind its planned ramp-up for the $35,000 Model 3. The problems could also worry the over 500,000 customers who have put down a refundable deposit on the vehicle.

After market close today, Tesla released its financial results and shareholders letter for the third quarter 2017. Investors' faith in him has been a large reason for Tesla stock's outperformance this year, which is up 50% so far this year.

Tesla's negative free cash flow expanded to -$1.4 billion, more than analysts' forecast for -$1.2 billion.

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

The company produced just 260 Model 3 cars in September, which was waaaaaaaaaay short of the 1,500 vehicles it had hoped to produce.

The company says it's on pace to deliver 100K vehicles for the full year.

Tesla shares were down 5 percent in extended hours trading.

Tesla acknowledged Wednesday that it would not achieve its previous goal of hitting a production rate of 5,000 Model 3 vehicles per week by the end of the year, instead pledging to do so by the "late" first quarter "based on what we know now". Excluding non-recurring items, such as a $1.1 billion in Brighthouse separation-related charges, adjusted earnings per share came to $1.09, above the FactSet consensus of 89 cents. Consequently, both Model S and Model X gained further market share in the U.S. luxury vehicle market. 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.

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