cars news 10: Tesla Model 3 Production on Schedule Despite Q1 Loss

Despite reporting a loss in the first quarter of this year, Tesla says the Model 3 sedan is scheduled to begin production in July as originally planned. The very first sedans will go to employees of Tesla and SpaceX, reports Bloomberg.

As it prepares to roll out the new sedan, Tesla has been running through cash quickly in the past two quarters. In fact, those two quarters were the largest cash burns in the company’s history. In this most recent period, Tesla lost $1.33 a share, which is worse than analysts anticipated. A whopping $622.4 million, about half of the amount Tesla raised in equity and debt offerings earlier this year, is now gone.

Analysts have expressed skepticism about Tesla’s ability to meet its production timeline for Model 3, given the automaker’s history. Both the Model S and Model X suffered delays, so it’s impressive that the automaker is sticking to its schedule this time around. Last year, Tesla said it wouldn’t repeat past mistakes that led to some of these hiccups. Not having enough internal capability to manufacture parts in-house slowed down the entire production process of the Model X, Tesla admitted at the time.

Earlier this year, Tesla halted production at its California assembly plant to accommodate the Model 3. It also built prototypes to ensure the quality of the car’s parts and work out any last minute bugs with the assembly system. Expected to start around $35,000 before incentives, the Model 3 will slot into the lineup as Tesla’s entry-level sedan.

Source: Bloomberg