SAN FRANCISCO _ Stock analysts expected abysmal first-quarter financial results from Tesla, and that's what they got.
The hyper-ambitious electric motor vehicle and renewable energy company, which is struggling to fix production problems on its make-it-or-break-it Model 3 electric sedan, reported a net loss of $784.6 million, slightly deeper than the $770.8 million loss it registered in the previous quarter and up substantially from the $397 million it lost in the same period last year.
More alarming, the company's cash drain _ as measured by free cash flow _ rose dramatically, to just over $1 billion, from $276.8 million in the previous quarter.
Cash on hand dropped to $2.7 billion, down from $3.4 billion at the end of 2017.
Tesla backtracked from its promise to burst-build 6,000 Model 3s a week by the end of June. Now, the company says, it will "produce approximately 5,000 cars a week in about two months." Tesla also said to expect more shutdowns of the Model 3 line in coming months to "address bottlenecks" and "increase production to new levels."
Not all the numbers were negative. Automotive revenue was up 1.2 percent, to $2.7 billion, in the first quarter, nudged up by delivery of 8,180 Model 3s, which carried a base price of $50,000 before options and government incentives. Plans to offer a $36,000 model are on hold.
Still, big questions remain: Will Tesla need to tap the capital markets for more cash this year, and, if so, will it be able to? Chief Executive Elon Musk has said Tesla doesn't need to raise debt or equity this year. But the bond-rating firm Moody's, which downgraded Tesla bonds in March, said the company will need a $2-billion cash infusion before the year is out.
Musk will speak with analysts by teleconference later Wednesday to address such questions.
The analysts are sure to ask Musk what he's done to rectify manufacturing snafus that have choked Model 3 production numbers and prompted more quality complaints than the company or its customers would like.
For the last couple of years, Musk had led investors to expect the Model 3 to reach an annual production rate of about 400,000 cars by the end of 2017. Instead, the company is struggling to hit an annual rate of 120,000. In the Wednesday report, Tesla said Model 3 production hit 2,270 cars a week in April "for the 3rd straight week over 2,000." Currently, Tesla's Model S and Model X, both priced near $100,000 with options, are the company's main products. The company forecasts flat unit sales this year at about 100,000.
Right now, though, Musk is in Model 3 repair mode.
In 2016, when he was setting his bold production targets, Musk also pledged to revolutionize manufacturing, with plants so highly automated they'd look like science fiction alien spacecraft compared with the factories run by other automakers today. Tesla's goal, he said, was to become the best manufacturing company on Earth.
Just last month, though, Musk acknowledged on the "CBS This Morning" TV show that he'd over-stuffed the Model 3 line with automation. He confessed that "I need to figure out how to be better" so Tesla could get better at building cars.
He then shut down the Model 3 line for a week to "improve automation and systemically address bottlenecks in order to increase production rates," as a company spokesman put it.
Meantime, Musk is grappling with a host of other problems.
Top executives continue to quit. The latest is George Eli, who ran Tesla's Western Europe operations. In April, Autopilot head Jim Keller departed for Intel. In March, Chief Accounting Officer Eric Branderiz left after less than two years on the job. In February, global sales and service head Jon McNeill announced his departure.
The company's next iteration of Autopilot appears to be delayed. A coast-to-coast road trip set for 2017, intended to demonstrate the system's upcoming autonomous mode, is on indefinite hold. (Some Model 3 drivers are paying an extra $3,000 for fully driverless software without knowing when Tesla might have it ready.)
Likewise, the world is still waiting for the solar-tile roof that Musk spotlighted at a well-publicized event held on the Universal Studios Hollywood backlot in October 2016.
