Tesla Model 3, Elon Musk’s Grail, Remains a Costly Pursuit

Its shares were up modestly in extended trading after the earnings report. They had risen 3.3 percent during the regular session.

Analysts fret about the hiccups Tesla has encountered and how much money it must spend while trying to move into high-volume production.

“Cash burn does matter, as it is a finite resource, and ramp delays on the Model 3 only exacerbate the cash burn,” Brian Johnson, a financial analyst at Barclays, wrote in a note to investors.

Putting the Model 3 into mass production is a critical task for Tesla and Mr. Musk, its chief executive. The company has taken $1,000 deposits from about 400,000 customers interested in buying the car. If it can begin producing the car rapidly, it will see its sales and revenue soar, and could vault into profitability.

The quarterly loss and new details about Model 3 production come at a sensitive time. Tesla has now lost money in eight of the last nine quarters, and has consistently overestimated how quickly it would be able to increase production of the Model 3.

Just two years ago, Mr. Musk hoped to make 500,000 by 2018, and the ambitious forecast helped drive Tesla stock, pushing its market value above that of General Motors and Ford Motor for a period of time in 2017.

Last July, as Model 3 production was about to begin, Mr. Musk ratcheted back expectations, resetting his target to 20,000 vehicles a month by December. But difficulties producing battery packs at its Nevada plant, called the Gigafactory, and other glitches in the car’s assembly process combined to slow output to a crawl.

Tesla built just 260 by the end of September. In January, it said it had made only 2,425 in the final quarter of 2017, and set a goal of increasing output to 5,000 a month by the end of the first quarter.

“They haven’t delivered what they’ve promised, but does it matter?” said Michelle Krebs, an analyst at Autotrader.com. “It doesn’t seem to matter to their investors and the customers who’ve put down deposits. When investors don’t put any more money into the company, then you will know it’s a problem.”

While working on the Model 3, Mr. Musk has continued to seek new barriers to break in other areas.

On Tuesday, his other company, SpaceX, successfully launched a heavy rocket into space. It was the first time a rocket that powerful had been launched by a private company. The Falcon Heavy is carrying a cherry-red Tesla Roadster. The rocket and the car are intended to go into an orbit around the sun, where they could remain for hundreds of millions of years.

SpaceX isn’t the only project demanding Mr. Musk’s attention. In 2016, he merged Tesla with SolarCity, a maker of solar panels where he had been chairman and a major shareholder. Last fall, he presented a battery-powered semi truck that he promised would revolutionize the trucking industry and be in production by 2019.

In January, Tesla also announced a new compensation plan in which Mr. Musk will be paid only if the company’s market value reaches a series of lofty milestones. Otherwise, he gets nothing. The payouts will begin if Tesla’s market value tops $100 billion, and will continue each time it rises by $50 billion. They end at a market value of $650 million.

Tesla is currently worth about $58 billion.

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