Tesla suffers record loss in fourth quarter of 2017

Elon Musk’s electric car and battery company Tesla has revealed the biggest quarterly loss in the company’s history, though it was not as bad as Wall Street estimates had feared.

The company reported a fourth-quarter loss of $675.4m from revenue of $3.29bn, compared to the $121m loss from $2.28bn sales a year before.

Tesla’s fourth-quarter loss was $513m after adjusting for one-off items, or $3.04 per share, which was less than analysts' consensus estimate of $3.15, according to FactSet.

The company is expecting revenues to take off in 2018 due to its release of the Model 3 car, where it assured it was on track to meet the target of producing 5,000 vehicles per week. Tesla said it was deferring some capital expenditure payments for the Model 3 to the first quarter of 2018.

"At some point in 2018, we expect to begin generating positive quarterly operating income on a sustained basis. With the planned ramp of both Model 3 and our energy storage products, our rate of revenue growth this year is poised to significantly exceed last year's growth rate. The launch of Model 3 is what Tesla had been building towards from day one," said the company.

"We were in a deeper level of Hell than we expected," Musk said on a conference call with analysts Wednesday, referring to production problems of the Model 3 that saw reports than some batteries were having to be assembled by hand.

"We were probably a little overconfident, a little complacent, in thinking this is something we know and understand," Musk said. With Tesla needing to make some batteries by hand, Musk was reported to have 'borrowed' employees from one supplier to help with assembly.

"If we can send a Roadster to the asteroid belt, we can probably solve Model 3 production. It's just a matter of time," he concluded, following the launch of a Tesla Roadster into space by one of Musk's other companies, SpaceX.

The company expects to be able to reach the 5,000-cars a week target for the Model 3 by the end of the second quarter of 2018. It will also have to deal with issues like cash burn, though free cash flow was down to $276.7m in the quarter, which was down from $1.4bn in the third quarter and $969.8m in the fourth quarter last year, as Musk pushed some spending into the first quarter of 2018.

Tesla's stock rose 3% ahead of results being released after the closing bell overnight, but futures were down 0.6% on Thursday. At $345, the stock has increased by 8% since the start of the year.