Tesla Inc delivered fewer-than-expected vehicles in its third quarter, fueling doubts about the company’s ability to turn a profit and sending its shares down nearly 6% in trading after the bell, APA reports citing Reuters.
Deliveries of all models rose 1.9% from the second quarter to 97,000 vehicles, including 79,600 Model 3 sedans and 17,400 Model S/X SUVs, below estimates of 97,477 vehicles.
Elon Musk had previously said that Tesla aims to be profitable in the fourth quarter, with the third quarter to be break-even. The company said it was focusing less on profit and more on volume growth, capacity expansion and cash generation.
Under pressure to meet his repeated promises to make Tesla sustainably profitable, Chief Executive Elon Musk is trying to contain costs while still spending on major initiatives from a Shanghai factory and assembly-line to upcoming models such as the Model Y SUV and a Semi commercial truck.
Sales of the S and X models, meanwhile, have declined in Norway this year, as some buyers have opted for the cheaper Model 3, while others have chosen recently introduced all-electric SUVs from Audi and Jaguar Land Rover.
However, Tesla’s Model 3 deliveries in the latest quarter were above analysts’ average estimates of 79,470, according to IBES data from Refinitiv.
The Model 3 is the linchpin of Tesla’s growth strategy and Musk is under pressure to deliver the vehicle to new international markets efficiently, while guarding working capital.
Overall, total production rose 10.5% to 96,155 vehicles, compared with the last quarter. The company churned out 79,837 Model 3s in the third quarter, up from a total of 72,531 Model 3s in the preceding quarter