Tesla says it’s “on track” to start producing its mass-market Model 3 electric vehicles in July, and plans to build 5,000 of the cars per week by the end of the year.
The company, which reported financial results for 2016’s fourth quarter and the full year today, also said it’ll pick locations for as many as three more Gigafactories this year. Tesla’s first Gigafactory, in Nevada, is already turning out power cells for the company’s energy storage system, while its second factory is building solar panels in New York.
“We start 2017 well positioned to scale our business significantly,” Tesla said in its typically upbeat quarterly letter to shareholders.
Investors reacted positively, turning Tesla’s price trend from a minus to a plus in after-hours trading.
Quarterly revenue exceeded Thomson Reuters’ expectations, reaching $2.28 billion rather than the predicted $2.19 billion. Tesla’s loss per share amounted to 69 cents, which was more than Thomson Reuters’ forecast of 42 cents but less than Bloomberg News’ advance estimate of $1.14.
Tesla announced that its chief financial officer, Jason Wheeler, will be leaving the company “to pursue opportunities in public policy.” Deepak Ahuja, who was Tesla’s first CFO but stepped away in 2015, will return to the role in early March. Wheeler will stay on at Tesla until early April to help with the transition.
The shift to the Model 3 looms as Tesla’s biggest challenge for the year ahead. It’s seen as the company’s crucial play for the automotive industry’s mass market. The Model 3 has a base price of $35,000, compared with more than $70,000 for Tesla’s Model S and $80,000 for the Model X.
Nearly 400,000 customers put down deposits for the Model 3 during the first month and a half of reservations last spring. Today, CEO Elon Musk declined to give an updated figure for reservations, saying that “people read too much into it.”
Tesla said Model 3 production should go from 5,000 vehicles per week at the end of 2017 to 10,000 per week sometime in 2018. That would arguably hit Musk’s goal of getting annual production to 500,000 vehicles.
The big question is, can Tesla do it? “The jury is still out as to whether or not they can sell enough Model 3s to become profitable, Michael Wolf, CEO and co-founder of the tech consulting firm Activate, said on Bloomberg Television. “Up until now, they’ve been a luxury car.”
During the quarter, Tesla acquired SolarCity, which focuses on producing and installing solar panels – and eventually plans to produce integrated solar roofs. The solar energy operation added $77 million in cash after the deal closed in November, but Tesla also took on $85 million in solar-related operating expenses.