San Francisco (AFP) – Tesla on Wednesday reported that it lost less money than the market expected and said it was making progress ramping up production of Model 3 electric cars.
The automaker reported net losses of $784.6 million on revenue of $3.4 billion in the first three months of this year.
The adjusted loss per share was $3.35, against expectations of $3.42 on a revenue of $3.32 billion.
Tesla shares swerved slightly higher at first then lower about a percent to $298 in after-market trades that followed release of the earnings figures.
The California-based firm said that it made “significant progress” in ramping up production Model 3 vehicles considered key to its success in the mass market.
Prior to a planned shutdown of production to make the system more efficient, Tesla managed to reach 2,270 vehicles a week. That rate is still shy of a goal that company founder and chief Elon Musk had set.
“We continue to target Model 3 production of approximately 5,000 per week in about two months, although our prior experience has demonstrated the difficulty of accurately forecasting specific production rates,” Musk said in an earnings letter to shareholders.
To achieve those Model 3 production numbers, Tesla will shut down its line again this quarter to make modifications, according Musk.
Tesla expected to shut down production for about 10 days to clear out ‘bottlenecks’ across the lines.
The company’s goal was to be cranking out 5,000 Model 3 vehicles weekly in about two months. Musk has set a similar target in the past, but missed it.
If improvements go to plan, Tesla will could begin showing profit in the second half of this year, he said.
Investors and analysts have expressed worry about how fast Tesla has been burning through cash, and stopping losses would be a major turn in the road for the company.
Tesla vowed to cut back projected expenses in the next couple of to just ‘critical needs’ to get the Model 3 production line up to speed and turning a profit.
The Moody’s ratings agency early last month downgraded the company’s credit further into junk status, saying Tesla might run out of cash if it did not raise more than $2 billion.
“We have good visibility of our path to fully ramp and stabilize Model 3 production this year,” Musk said.
“The path to an electrified revolution is not easy, but what we’re trying to achieve is worth fighting for.”
Production bottlenecks have plagued the company, with much of its future banked on the Model 3, its first mid-price, mass-market vehicle.
The continued struggle to ramp up production comes as Tesla is facing a federal investigation into a recent fatal crash involving Autopilot, its driver assistance system, and the voluntary recall of 123,000 Model S sedans announced last week.
The head of Tesla’s Autopilot project left the carmaker last week.
The executive, Jim Keller, moved to chipmaking giant Intel, both companies said.
Keller’s departure adds to the challenges of the electric car giant’s effort to craft self-driving technology.
Keller’s last day at Tesla was Wednesday, and he was the third Autopilot project head to leave in about two years. He oversaw low-voltage hardware, autopilot software, and “infotainment,” according to Tesla.