Tesla posts record quarterly loss of $619M on Model 3 delays

Published: Wednesday, November 01, 2017 @ 7:18 PM
Updated: Wednesday, November 01, 2017 @ 7:17 PM


            FILE - This Friday, Sept. 30, 2016, file photo shows the logo of the Tesla Model S on display at the Paris Auto Show in Paris. Tesla Inc. reports earnings Wednesday, Nov. 1, 2017. (AP Photo/Christophe Ena, File)
FILE - This Friday, Sept. 30, 2016, file photo shows the logo of the Tesla Model S on display at the Paris Auto Show in Paris. Tesla Inc. reports earnings Wednesday, Nov. 1, 2017. (AP Photo/Christophe Ena, File)

DETROIT (AP) — Tesla Inc.'s first attempt at high-volume production isn't going as well as it hoped — and the company has a record quarterly loss to show for it.

Tesla posted a $619 million loss in the third quarter as it spent heavily to clear up production bottlenecks and bring its hotly anticipated Model 3 sedan to market.

The loss, of $3.70 per share, compared to a profit of 15 cents per share in the July-September period a year ago. That was a far bigger decline than Wall Street had predicted. Analysts polled by FactSet forecast a loss of $2.85 per share.

Tesla's shares dropped about 5 percent to $305.31 in after-hours trading Wednesday.

The $35,000 Model 3 — which is half the cost of Tesla's previous models — could move Tesla from a luxury niche automaker into the mainstream. It introduced the Model 3 in July with a massive party at its Fremont, California, factory.

Tesla CEO Elon Musk promised that the Model 3, which has more than 500,000 potential buyers on its waiting list, would be simpler to make than Tesla's previous vehicles and not plagued with the same delays. But the company produced just 220 Model 3s in the third quarter, far fewer than the 1,500 Musk promised.

And the problems will continue. Tesla said it now expects to make 20,000 Model 3s per month by the end of 2018's first quarter. Musk had initially set a target of December for that production. Musk said a supplier to the battery factory was partly to blame for the delays.

"Tesla is learning what traditional automakers have long known — mass vehicle assembly is complicated and expensive," said Michelle Krebs, a senior analyst at Autotrader.com.

Musk — who held the company's earnings conference call from the company's Nevada battery factory — insisted things were improving. He said Tesla will likely be making a few thousand Model 3s per week at the end of this year.

"I was really depressed about three or four weeks ago," he said. "Now I can see a clear path to sunshine."

And while some customers may be frustrated by the delays, they're not necessarily losing faith in Tesla.

"It is disappointing, but I would rather that Tesla make the car correctly and to an optimal finish than rush and turn out a disappointing product," said Lisa Gingerich, a Milwaukee-based attorney who reserved a Model 3 within minutes of the order bank's opening in March 2016. "At the rate Tesla is producing, the Model 3 may be my Christmas present to myself next year!"

A defiant Musk also stressed that the 14-year-old company recently delivered its 250,000th vehicle, up from 2,500 just five years ago.

"For the skeptics out there, ask them, which one of them predicted that Tesla would go from 2,500 units delivered to 250,000 units now? I would suspect zero," Musk said.

Tesla had other significant expenses in the quarter. The company opened 18 stores and service stations worldwide and set up 126 new Supercharger stations to try to prepare for the increase in demand from Model 3 buyers.

Musk didn't confirm reports that the company has selected a site for a new factory in China. He said the company expects to start production there in three years, and that vehicles made in China will primarily be sold there and in neighboring countries.

He did confirm that Tesla fired 700 workers — or about 2 percent of its workforce — earlier this month because of poor performance reviews. But he said the company's action was a typical one, not the result of the Model 3 issues.

Tesla's revenue rose 30 percent to $2.9 billion for the quarter, in line with analysts' expectations. Tesla said installations for its energy storage business more than doubled from a year ago. Energy generation and storage accounted for 11 percent of Tesla's third quarter revenue.

Sales of Tesla's two other vehicles — the Model S sedan and Model X SUV — rose 4.5 percent to 25,915. Tesla said net orders for those vehicles hit a record level in the third quarter, setting the stage for record deliveries in the fourth quarter. The company says it's on track to deliver 100,000 Model S and Model X vehicles in 2017, up 30 percent from 2016.

Troopers: Naked couple crashes car while having sex; baby was in back seat

Published: Friday, November 24, 2017 @ 1:25 AM

Washington State Patrol.
David Ryder/Getty Images
Washington State Patrol.(David Ryder/Getty Images)

A naked couple, having sex in their car while their baby was in the back seat, crashed while driving, the Washington State Patrol said.

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The man was driving on Highway 7 near La Grande in Pierce County, naked and having sex with a woman who also was naked, when he missed a curve, went off the road and struck a tree, State Patrol spokeswoman Brooke Bova said.

The crash occurred Wednesday at 6 p.m. troopers said.

Witnesses told troopers both the man and woman were naked when they got out of the car, The Everett Herald reported. Troopers said they were also both impaired.

The woman wasn't wearing a seat belt. She was taken to the hospital with several broken bones. The 3-month-old child in the back seat was not injured.

The man was arrested and booked into Pierce County Jail on suspicion of driving under the influence, vehicular assault and child endangerment, the Herald reported.

Troopers said the man has three prior DUI convictions.

Woman helps raise more than $300,000 for homeless veteran who gave her his last $20

Published: Wednesday, November 22, 2017 @ 8:32 PM
Updated: Wednesday, November 22, 2017 @ 8:32 PM

Homeless Vet Gives Stranded Woman Last $20, She Thanks Him by Raising Over $70,000

A New Jersey woman has helped raise more than $300,000 for a homeless man who helped her when she was in a time of need. (Editor’s note: The figure was updated Friday, Nov. 24, 2017.)

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Kate McClure was driving on I-95 in Philadelphia recently when her car ran out of gas. According to PhillyVoice.com, McClure got out of her car to walk to a gas station when she was approached by a homeless man, identified only as Johnny. Johnny told McClure to get back in her car and lock the door. He later returned to the vehicle with a can of gas. He had purchased the gas with what little money he had. 

McClure, who was in town to visit a friend, didn’t have anything to give to repay Johnny at the time, so she told him she would return. 

She kept her word.

According to a post online, McClure says she returned to visit Johnny, 34, at his spot by the side of the interstate with clothes, food and money. Each time, Johnny showed gratefulness and generosity.

“One day, I stopped to see him and had a few things in a bag to give him, one of which was a box of cereal bars so he could have something that he could carry around and eat,” McClure wrote. “He was very appreciative as usual and the first thing he said was, ‘Do you want one?’ Another time I dropped off (two) Wawa gift cards and a case of water. The first words that came out of his mouth were, ‘I can’t wait to show the guys’ -- there are (two) others he hangs out with, and they all take care of each other.”

McClure still felt compelled to do more for Johnny, so she created a GoFundMe account, hoping to raise $10,000 to help get Johnny a car, an apartment and some materials and amenities. 

In less than two weeks, McClure raised more than $318,000.

“With the money, I would like to get him first and last month’s rent at an apartment, a reliable vehicle and 4-6 months worth of expenses,” McClure wrote. “He is very interested in finding a job, and I believe that with a place to be able to clean up every night and get a good night’s rest, his life can get back to being normal. (I) truly believe that all Johnny needs is one little break.”

Johnny told PhillyVoice.com that he was once a licensed paramedic and also served in the Marine Corps. He said he moved to Philadelphia last year with plans to start a new job, but when things fell through, he became homeless. 

File photo - Man carrying gas can to car at roadside(Sam Edwards/Getty Images/Caiaimage)

He says now he wants to get a job at the Amazon warehouse in Robbinsville, New Jersey, and hopes to one day become recertified as a paramedic.

“(This) changes my life,” he said.

British police respond to incident at London’s Oxford Circus station

Published: Friday, November 24, 2017 @ 12:31 PM
Updated: Friday, November 24, 2017 @ 1:03 PM

Police set up a cordon outside Oxford Circus underground station as they respond to an incident in central London on November 24, 2017.
British police said they were responding to an
Police set up a cordon outside Oxford Circus underground station as they respond to an incident in central London on November 24, 2017. British police said they were responding to an "incident" at Oxford Circus in central London on Friday and have evacuated the Underground station, in an area thronged with people on a busy shopping day. (DANIEL LEAL-OLIVAS/AFP/Getty Images)(AFP Contributor/AFP/Getty Images)

British police said they were responding to reports of an incident at the Oxford Circus subway station, one of London’s busiest, Friday evening.

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Native Americans mark Thanksgiving with day of mourning

Published: Friday, November 24, 2017 @ 11:43 AM

Juan Gonzalez of Boston rekindles a small fire with“ the smoke symbolizing a ritual for healing and a connection with the
Juan Gonzalez of Boston rekindles a small fire with“ the smoke symbolizing a ritual for healing and a connection with the "creator." He has been attending this day of mourning for 30 years. "We feel the pain of the Wampanoag," said Gonzalez. United American Indians of New England gather for the National Day of Mourning across from Plymouth Rock in Plymouth, MA on Thursday, November 25, 2010. The day signifies the deaths of American Indians at the hands of early settlers and colonists and the independence of American Indians. (Photo by Yoon S. Byun/The Boston Globe via Getty Images)(Boston Globe via Getty Images)

Members of Native American tribes from around New England gathered Thursday in Plymouth, Massachusetts, the town where the Pilgrims settled, for a solemn observance of National Day of Mourning.

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Thursday's gathering served to acknowledge and remember the disease, racism and oppression that European settlers brought.

This year was the 48th year that the United American Indians of New England organized the event on Thanksgiving Day.

Moonanum James, a co-leader of the group, said native people have no reason to celebrate the arrival of the Pilgrims in 1620.

"We say, 'no thanks, no giving,'" he said.

Along with prayers and public speeches, participants condemned environmental degradation and government restrictions on immigration. They also planned a "stomp dance" to symbolically stomp out opioid addiction, which has ravaged many native communities.