Tesla posted its latest earnings results Wednesday and said it was making progress ramping up production of Model 3 electric cars.
The California-based electric carmaker posted a loss of 709.6 million dollars, compared to a 330 million dollar loss at this time last year.
However, revenue was up to 3.4 billion dollars compared to 2.7 billion this time last year – a figure above what analysts predicted.
In a letter to shareholders,Tesla said that it made significant progress in ramping up production of 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 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 to Musk.
“If we execute according to our plans, we will at least achieve positive net income excluding non-cash stock based compensation in Q3 and Q4 and we expect to also achieve full GAAP profitability in each of these quarters,” Tesla noted in a letter to shareholders. “This is primarily based on our ability to reach Model 3 production volume of 5,000 units per week and to grow Model 3 gross margin from slightly negative in Q1 2018 to close to breakeven in Q2 and then to highly positive in Q3 and Q4.”
Tesla revealed it has more than 450,000 Model 3 reservations at the end of the first quarter.
Although much attention has been paid to the Model 3, Tesla said demand for the Model S and Model X is still quite strong. In Q1, Tesla had its highest order number ever, with demand exceeding supply. Tesla said it produced 24,728 Model S cars and Model X vehicles, while delivering a total of 21,815 of them.
Looking forward into Q2, Tesla expects Model S and X deliveries to be similar to the ones in Q1. But Tesla said that number will increase in Q3 in order for Tesla to hit its goal of 100,000 deliveries for 2018.