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Tesla burns through $2 billion in 2017

Tesla burns through $2 billion in 2017


Cash continues to flow out with Model 3 mired in production hell

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Photo: Tesla

Tesla reported record revenue for 2017, floated by customer deposits of the recently announced Semi truck and Roadster sports car. Despite its optimistic sales numbers, Model 3 production issues and cash flow problems haunt the company, but Tesla insists its on track to meet its production goals of 5,000 cars a week by mid-2018.

Tesla reported $3.3 billion in revenue, which was expected, but also posted a $771 million quarterly loss — its largest quarterly loss ever. The company reported a negative free cash flow of $276.7 million. And it reported a net loss of $2.24 billion in 2017, a significant increase over the $773 million net loss it reported in 2016.

We already know Tesla’s 2017 was a mixed bag, to say the least. There were highs: the launches of the Model 3, Semi, and Roadster. There were lows: painful quality reports from early Model 3 examples built last fall, damning safety and labor accusations in October, and a steady stream of cash going out the door to get the Model 3 and Gigafactory production lines up to speed.

The company reported that Model 3 deliveries were 1,550 in 2017, according to a report released on January 3rd, and in the fourth quarter of last year, 2,425 Model 3s were made, according to the automaker. Just after the car’s launch, another 260 were built in the third quarter.

Overall, Tesla delivered more than 102,000 vehicles in 2017 when Model S and Model X vehicles are included, above its target of finding homes for 100,000 vehicles in the year.

Tesla’s third quarter report from 2017 showed the company’s efforts to get the Model 3 into production are costing a fortune. The company lost more than $600 million in that three-month period alone, more than it lost in all of 2016. Therefore, the full-year loss numbers make for grim reading.