Tesla Posts Q1 Loss as Ramp up to Model 3 Production Continues

Tesla Posts Q1 Loss as Ramp up to Model 3 Production Continues

Tesla has reported a loss of $330-million in the first quarter of this year, although the brand’s revenue did more than double. 

The company increased vehicle production by 64 percent year-over-year, enabling Tesla to move 25,051 Model S and Model X electric cars in the first three months of 2017. That is responsible for the bump in revenue up to $2.7 billion, but the ramp up for the Tesla Model 3 to begin production is costing the company a lot along with the acquisition of SolarCity.

Tesla expects that year-to-date capital expenditures will be around $2-billion by the time Model 3 production kicks off.

ALSO SEE: Why Mercedes Has Better Self-Driving Technology Than Tesla

Tesla is hoping to sell between 47,000 and 50,000 vehicles in 2017, helped by the new Model 3, which the brand claims will be on sale by the second half of this year, with production kicking off in July. At “some point” in 2017, Tesla plans to manufacture 5,000 Model 3 sedans a month, while by 2018, Tesla plans to build 10,000 units a week.

More cash will be burned on setting up the proper infrastructure for the Model 3, Tesla’s first mass-produced vehicle. A 30 percent increase in retail facilities is planned worldwide for 2017, while new Tesla-owned body repair shops are being opened to fix out of warranty Tesla vehicles. A fleet of 100 more mobile repair trucks is also being added in Q2 alone.

The Model 3 will start at $35,000 before incentives, packing a 215-mile range.