Tesla says Model 3 on track as loss narrows

Tesla posted a narrower-than-expected quarterly loss and said revenues rose more than expected, in its first results since the automaker completed its $2bn acquisition of SolarCity in November. The company also said the development of its Model 3 mass-market vehicle remains on track.

The Palo Alto-based company, which delivered fewer cars than it had initially estimated in 2016, said it expects to deliver a combined 47,000-50,000 of its Model S and Model X vehicles in the first half of the year, which is 61 to 71 per cent higher than the first half of 2016.

The guidance accompanied a fourth-quarter loss that narrowed to $121.3m or 78 cents a share, in the three months ended in December, compared with a loss of $320.4m, or $2.44 a share, in the in the year-ago period. However, that fell short of its third-quarter profit of $21.9m.

Adjusting for one-time items, the 69 cent loss was slimmer than the loss of $1.13 a share that analysts had forecast.

Revenues nearly doubled from a year ago to $2.28bn, ahead of Wall Street expectations, despite sliding 1 per cent sequentially.

Investors also appeared to take comfort in Tesla’s claims that its Model 3 vehicle was on track for initial production in July “and to steadily ramp production to exceed 5,000 vehicles per week at some point in the fourth quarter and 10,000 vehicles per week at some point in 2018″. Tesla has frequently been hamstrung by production glitches and was delayed by two years in launching its falcon-winged Model X vehicle.

The results come as technology companies like Alphabet are pushing into the autonomous vehicle space. Mr Musk has also set an ambitious target for Tesla cars to drive across the United States without any human control by the end of the year. In an effort to meet that goal he tapped Apple’s Chris Lattner to run its Autopilot car software.

Tesla shares climbed 2 per cent in extended trading. So far this year, the company’s stock has advanced 28 per cent as Mr Musk’s place on Donald Trump’s business advisory council has helped burnish sentiment. That comes despite Tesla’s acquisition of solar panel maker SolarCity in November that was part of Mr Musk’s renewables dominance but was decried by analysts as a combination of two capital hungry businesses.