Tesla has posted a hefty quarterly net loss, and said it is cutting prices to clear out its inventory. The company reported 3,900 vehicles delivered during the September quarter — a 37 percent increase from the second quarter. It broke its previous record of 2,619 deliveries. Tesla also said it was adding up to $3,000 to the discounts on the Model S, Model X and Model 3.
In its report, the company said it’s still trying to push out batteries from a Fremont, Calif., plant that produces all of its cars, but which is still shut down for renovations and upgrades to its robots. It warned that the challenge of providing batteries at such a scale would limit the company’s ability to deliver more Model 3 cars in its third quarter, which ends this month.
“We have done the work to make our Gigafactory into an island for batteries, but the batteries are not there,” said Tesla Chief Executive Elon Musk. “We know the problem is not that we don’t have the batteries — it’s that we aren’t producing the batteries.”
Tesla has invested heavily in the Gigafactory, which opened in 2015. Its engineers are currently devising a “master plan” for an expansion of the factory, and for new products. But the Gigafactory is still relatively new, and is not equipped to create electric battery packs at the sort of scale required to serve customers.
In order to free up space for battery production, the company has slashed prices on its vehicles by 20 percent or more. It also used the occasion to announce its plans to build a 250-mile-range Model 3 for $35,000 — making it far cheaper than Tesla’s cheapest model, the Model S, which starts at $70,000. (The company also began discounting Model S sedans and Model X SUVs, which have greater ranges.)
While its sales of Model S and Model X sedans are on the rise, its Model 3 sales are still “tiny,” Musk said on an earnings call with analysts. Demand for the Model 3 is so slow right now that the company may have to dramatically alter its delivery timeline, he said.
Investors seem to be reacting favorably to the deal to reduce prices. Tesla’s shares have climbed 3 percent since last week.