Tesla on Tuesday garnered plenty of attention with the rocket launch of its Tesla Roadster into space. On the following day, Tesla announced it was pushing back the arrival of the Model 3 by nine months.
The Tesla Model 3, with a sticker price of $36,000, reportedly causing headaches for the electric car company. Instead of the vehicle arriving in late 2018, it will now arrive by early 2019.
According to Seeking Alpha, the news of the delay raised concerns for early buyers of the electric vehicle and included the resignation of the of Jon McNeill, former head of sales.
“In what must have been the most surreal afternoon in Tesla (TSLA) history, the main surprise during the 4Q 2017 financial results conference call wasn’t even that the head of sales (and service), Jon McNeill, left the company. And you know what they say about what to do when the head of sales leaves the company…”
As stated by a Bloomberg report, the news of the delay was made known via an email to customers who got in line in March of 2016 to place deposits for the Model 3.
“Several would-be drivers said they received e-mails from the electric-car maker on Wednesday night — after the company reported its fourth quarter earnings — saying their expected delivery dates had been pushed back. Some Day 1 reservation holders are now seeing “late 2018” for the $35,000 Model 3 with the standard battery pack, while others who placed orders the following day have reported their date is now “early 2019.”
The analysis above goes on to add that drivers who were looking to bank on the $7,500 federal tax credit could miss out. In other words, Tesla is on the brink of selling 200,000 cars in the U.S and because of that, it will automatically phase out the tax credit.
In spite of the developments, Elon Musk stated during the earnings call on Wednesday that Tesla remains on track to meet its goal to build 5,000 Model 3 Sedans a week by the end of June. This has been delayed multiple times already.
Well, my bad @Tesla Model 3 news finally came, friends. My estimate in MyTesla got updated and...it's not good if you're wanting the standard battery or all-wheel drive. I'm in the latter camp. Very bummed out right now, as this has serious tax credit implications: pic.twitter.com/FBWNnUgPdV— Ryan McCaffrey (@DMC_Ryan) February 8, 2018
Elsewhere, the New York Times confirmed the electric-car maker had lost more than three-quarters of a billion dollars in the fourth quarter. In addition, the company’s CEO said there were difficulties with mass producing the Model 3 Sedan.
“In a conference call with analysts, Mr. Musk, the chief executive, acknowledged that Tesla still faced challenges in putting the Model 3 into mass production. “We were in a deeper level of hell than we expected, still a few levels deeper than we would like to be,” he said.
Tesla says it lost nearly three-quarters of a billion dollars in the fourth quarter, but saw rising sales of its Model S and Model X vehicles https://t.co/htXzmr85pj— The New York Times (@nytimes) February 8, 2018
As reported by the Times, it is mission critical and important for the Model 3 to succeed. Furthermore, it could help catapult Tesla to generate sales and revenues.