Tesla reported its biggest quarterly loss in the company’s history and will reduce Model X and Model S vehicle production to focus on Model 3.
After laying off 3,000 SolarCity employees last year to improve “efficiencies,” Elon Musk’s Tesla Motors is also looking in bad shape, according to Business Insider UK report. Climbing out of “production hell” proves challenging.
In a statement, Tesla said,
“While we continue to make significant progress each week in fixing Model 3 bottlenecks, the nature of manufacturing challenges during a ramp such as this makes it difficult to predict exactly how long it will take for all bottlenecks to be cleared or when new ones will appear.”
Bloomberg business highlights:
- Adjusted loss per share: -$2.92 (-$2.23 expected).
- Revenue: $2.98 billion ($2.39 billion expected).
- Free cash flow: –$1.4 billion (-$1.2 billion expected)
This is the biggest loss reported for the company but, on the other hand, they have made many groundbreaking strides in the electric vehicle, energy storage, and solar power industries:
- world’s only fully integrated sustainable energy company
- best and highest-selling pure electric vehicles
- highest rated and safest cars in the world
- powering several islands with solar panels
It seems all the moving parts and Musk’s other projects (SpaceX, HyperLoop, Boring) got a bit out of hand and he needs to bring things back in order. This is to be expected when you’re changing the world; there are bound to be obstacles, conflicts, and mistakes along the way.
— Elon Musk, Tesla CEO
Tesla Motors is racing to make 5,000 Model 3’s per week by end of Q1 2018, and so cut Model S and X production 10% for Q4 2017.
But besides inefficiencies and production bottlenecks, former employees are upset for being given no warning or performance review for their termination. The sudden layoff for reasons they cannot see have shocked and upset many of them. Perhaps trying to keep pace with production goals and innovation, the employees’ condition was overlooked and required immediate action.
Former Tesla employee, Daniel Grant, supported the union effort because of dangerous working conditions in the factory and believes he was fired for it.
“Management pushed us hard, and it created very real risks for us working on the line,” Grant said in an email. “That’s why I wore a union T-shirt, and that’s why I handed out flyers.”
Although Tesla admits it’s injury rate surpassed the industry average before, it says they have been declining steadily.
Do you still have faith in the future of sustainable energy? Is the $35k Model 3 worth the wait for you? Let us know in the comments below.