Tesla posts heavy losses
Shares drop after worst red ink numbers to date.Tesla shares fell 7.6 per cent overnight after the company announced an $870 million ($US671m) third-quarter loss -- its largest ever quarterly deficit.
In the same quarter last year Tesla recorded a $28m ($US22 million) net profit.
The company attributed this record loss to ramping up production of the Model 3.
Tesla also cited the failure to boost production to 5000 Model 3s per week from next quarter as impacting its profits.
The Palo Alto, California based electric car specialist now says production will reach its 5000-a-week target in the first quarter of 2018.
Further impacting sales of the in-demand Model 3, battery production at Tesla's Nevada-based Gigafactory is struggling to keep up.
Addressing the issue, Tesla says it will make 10 per cent fewer Model S and Model X vehicles in the fourth quarter in order to dedicate more resources to the manufacture of Model 3 batteries.
It wasn't all bad news, however. In the third quarter Tesla says its revenue grew to $3.1 billion ($US2.36b).
During the third quarter, Tesla told investors it spent an incredible $2.1 billion ($US1.4b) on investment, up from the $1.5 billion ($US1.16b) it spent in the second quarter.
According to industry newswire Automotive News, Tesla CEO Elon Musk is now under increasing pressure from investors for failing to deliver on production promises for the Model 3.
Originally, Musk told his backers that by December Tesla would have manufactured more than 20,000 of its entry-level model. As of October 2, the US car-maker was forced to admit it had made just 260 vehicles.
Concerns over both Tesla's struggles to gear up its Model 3 assembly line and the added complexity in welding the Model 3's steel body have also raised plenty of eyebrows among Musk's financiers.
According to the report, the complexity of the Model 3's steel body requires a huge number of robots which can't be replaced by human labour if there's a fault on the line.
Despite the issues with its Gigafactory, Tesla is reportedly already pushing forward with ambitious plans to open a new factory in Shanghai. The Chinese manufacturing hub is designed to help escape China's costly 25 per cent import tariffs.
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