Tesla’s financial issues showcase production problems image

Tesla Motors, the youngest publicly traded US automaker announced wider losses for the second quarter, even though consumers want more of its electric cars than the company can produce.

Having demand outstrip supply is a problem most companies dream of – but for Tesla the situation is becoming a dangerous issue. Chief executive officer Elon Musk and CFO Deepak Ahuja recently released the second quarter financial results, showing the company lost more money even though it had increased the revenue from selling cars by 24 percent. And the updates from the executives show the issues Tesla is dealing with today. For starters, the sales prediction for the full year has been throttled down from 55,000 to a range of 50 to 55,000 units. The most likely reason for the new target is a new delay on the already massively postponed high-tech electric sprout utility vehicle, the Model X. The crossover should have reached its clients back in 2014, but it has been tipped now for September, with deliveries and production cranking up during the last quarter. And a single supplier delay could mean 800 vehicles postponed each week.

More so, the company also warned that switching to production of two models instead of one could result in lower output of the current flagship Model S sedan. Additionally, the new business unit Tesla Energy, seems to have hit delays of its own. Back in May when it was first announced, deliveries would have started “this summer” but now only production is scheduled for “this quarter,” with output growing beyond. The bigger picture here is the following: with all these delays, is Elon Musk going to deliver on his promise to disrupt the auto industry in 2020 when his cars – the Model S, Model X and upcoming Model 3 – should sell 500,000 units?

Via Bloomberg