Tesla’s Speeds Production Plan as Losses Deepen

Tesla Motors Co.'s net loss grew to $282 million in the first quarter from $154 million in January-March 2015. The red ink—caused mainly by production delays for the Model X crossover and launch costs for the upcoming Model 3 electric sedan—was more than twice what analysts expected.

Revenue for the period grew 22% to $1.1 billion, as EV sales advanced nearly 50% to 14,800 vehicles. But the volume was below expectations because of the Model X’s tardy launch schedule.

CEO Elon Musk offset the uneven financial news by telling analysts Tesla now intends to achieve overall annual sales of 500,000 units by 2018, two years sooner than its previous goal. He cautions that doing so could prevent the company from achieving positive cash flow by the end of this year as previously planned.

Musk also says Tesla will begin building its next electric car, the Model 3, in July 2017. The company hopes to build at least 100,000 of the cars by the end of next year.

Musk declares the Model 3 will be significantly easier to assemble than the Model X crossover, whose production has been slowed by technical problems with the car’s zoomy “falcon wing” doors and pedestal seats. He says no component in the Model 3 will be approved by the company’s manufacturing staff unless it can be assembled smoothly.

Tesla says it has collected $1,000 order deposits from 325,000 potential buyers of the Model S since it unveiled the car on March 3. The $35,000 sedan will be the company first mass-market entry and is considered critical to Tesla’s long-term financial viability.