Teslas Late Again

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What's going on?

Teslas warning lights once again flashed red on Wednesday. Production of its new Model 3 vehicle is months behind schedule, and its weighing on the companys finances, with losses almost doubling in the third quarter.

What does this mean?

Back in 2006, CEO Elon Musk laid out a master plan (you can read it here) for how Tesla would help push society towards electric cars: build a sports car, use the money you make from that to build a more affordable car, and use that money to build an even more affordable car. After early successes with more high-end cars, the Model 3 that launched earlier this year was that even more affordable” car.

But things dont seem to be going as planned, as Tesla finds itself behind schedule on production of the Model 3 due to issues with battery manufacturing. Ramping up production has come at a cost: Teslas losses almost doubled this quarter compared to the previous one, partly because it was forced to take on parts of the supply chain itself due to the battery issues.

Why should I care?

For the stock: Teslas shares fell 5% following the news.

Tesla said it is confident it can pick up production of the Model 3 in the coming weeks and that it has no fundamental issues with its supply chain. But investors have become increasingly wary. The Model 3 is seen as key to Teslas future, and manufacturing complications as well as increasing losses are weighing on investors minds. And this isnt the first time Teslas fallen behind on production.

For you personally: You may have to wait a little longer to buy an affordable Tesla.

In the third quarter, Tesla only produced 222 Model 3s. It had previously aimed to produce 5,000 a week by the end of this year, but this goal has been postponed by a few months. To put this into perspective, Tesla has over 500,000 people on its waiting list for the Model 3. Join the queue!

Originally posted as part of the Finimize daily email.

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