Tesla's net loss in the first quarter was nearly $400 million. Model 3 will be mass-produced as scheduled

In the first quarter of 2017, Tesla's revenue hit a record high, but its net loss widened. However, this is not surprising for Tesla, which is busy producing Model 3.

On May 4, Beijing time, Tesla, an American electric car manufacturer, released its first quarter financial report for 2017. The financial report shows that Tesla's total revenue in the first quarter was US$2.696 billion, a year-on-year increase of 135%, setting a new record for single-quarter revenue in the company's history; the net loss attributable to common shareholders was US$397 million, an increase from US$282 million in the same period last year. Among them, the revenue of the automotive business was US$2.29 billion, a year-on-year increase of 123%; the revenue of the power generation and energy storage business was US$214 million, a year-on-year increase of 841%.

Tesla's revenue growth is mainly due to the sharp increase in vehicle deliveries. In the first quarter of this year, Tesla delivered more than 25,000 vehicles, a year-on-year increase of nearly 69%. Among them, the delivery volume of Model S was 13,500, a year-on-year increase of 5.9%; the delivery volume of Model X was 11,200, a year-on-year increase of 21.5%. In the 2016 financial report, Tesla predicted that it would deliver 47,000 to 50,000 vehicles in the first half of this year, and has currently achieved 50% of the target.

Jack Nerad, a market analyst at Kelly Blue Book, a professional automotive evaluation company in the United States, said: "Although Tesla's sales increased by 69%, the first-quarter sales performance is impressive. But investors expect to see not only sales, but profitable sales." Since 2010, Tesla has only had two profitable quarters in its history as a listed company.

For investors, the most concerned issue is the production of Tesla's mass-market car Model 3. Tesla previously said that Model 3 will be mass-produced in July this year. In order to achieve this goal, Tesla has invested a lot of money in production. In addition, Tesla also needs to expand the charging network, retail stores and service centers required for the car. Coupled with the acquisition of SolarCity in November last year, Tesla suffered a huge loss in the first quarter of this year.

In a letter to shareholders, Tesla announced that it will add 100 retail, distribution and service outlets around the world this year. The highly anticipated Model 3 will also go into production as scheduled in July. Tesla expects the weekly production of Model 3 to reach 5,000 this year and 10,000 next year. Currently, the orders for Model 3 have reached nearly 400,000. If all these orders can be delivered, Tesla will be able to achieve continuous quarterly profits.

However, it is not easy for Tesla to deliver the Model 3 on time. Today, the Model 3 production is still to be perfected, and some factory improvements required to produce the Model 3 are still being improved. Under normal circumstances, automakers have completed the construction of related equipment several months before the car is ready for production, so that there is enough time to test it exhaustively.

Last year, Tesla started construction of the Nevada Super Battery Factory, which it planned to invest $5 billion in. Tesla also plans to invest an additional $350 million to build a production line in the Super Battery Factory to produce electric motors and gearbox parts. The Model 3 is produced in Tesla's factory in Fremont, California, but the Model 3's electric motor is produced in the production line built in the Super Battery Factory. For Tesla, the reason for moving the electric motor production line to the Super Battery Factory in Nevada will help maximize the car production capacity of the Fremont factory.

However, Musk is also worried that the production of Model 3 will affect Model S. "One of our challenges is to eliminate misunderstandings about the differences between Model S and Model 3." Tesla said in a statement that some people think that Model 3 is an upgrade to Model S, but this is incorrect. Compared with Model 3, Model S has a longer range, faster acceleration, more horsepower, and more spacious passenger space.

Recently, Tesla's market value has soared, surpassing Ford and GM. "Tesla is on the verge of a major transformation. The first quarter's performance can only prove that Tesla has made some progress, but the financial reports in the next three to six months are the key, which will determine Tesla's operating performance in 2017." Karl Brauer, publisher of Kelly Blue Book, said that given Tesla's current operating performance, from an investment perspective, such a market value seems too high.

As a winner of Toutiao's Qingyun Plan and Baijiahao's Bai+ Plan, the 2019 Baidu Digital Author of the Year, the Baijiahao's Most Popular Author in the Technology Field, the 2019 Sogou Technology and Culture Author, and the 2021 Baijiahao Quarterly Influential Creator, he has won many awards, including the 2013 Sohu Best Industry Media Person, the 2015 China New Media Entrepreneurship Competition Beijing Third Place, the 2015 Guangmang Experience Award, the 2015 China New Media Entrepreneurship Competition Finals Third Place, and the 2018 Baidu Dynamic Annual Powerful Celebrity.