“Cash burn does matter, as it is a finite resource, and ramp delays on the Model 3 only exacerbate the cash burn,” Brian Johnson, a financial analyst at Barclays, wrote in a note to investors.
Putting the Model 3 into mass production is a critical task for Tesla. The company has taken $1,000 deposits from about 400,000 customers interested in buying the car. If it can begin producing the car rapidly, its sales and revenue will soar and it could vault into profitability.
In July, as Model 3 production was about to begin, Mr. Musk ratcheted back expectations, resetting his target to 20,000 vehicles a month by December. But difficulties producing battery packs at Tesla’s Nevada plant, called the Gigafactory, and other glitches in the car’s assembly process combined to slow output to a crawl.
Tesla built just 260 by the end of September. In January, it said it had made only 2,425 in the final quarter of 2017, and set a goal of increasing output to 5,000 a month by the end of the first quarter.
Mr. Musk said Tesla had developed a new automated production line that would be installed in the Gigafactory in March, easing hitches in supplying batteries to its assembly plant in Fremont, Calif., which was once operated jointly by Toyota Motor and General Motors.
Tesla now hopes to be able to produce 2,500 Model 3s a week by the end of March and 5,000 a week by the end of June. Mr. Musk said it aimed eventually to produce 500,000 Model 3s a year.
“They haven’t delivered what they’ve promised, but does it matter?” said Michelle Krebs, an analyst at Autotrader.com. “It doesn’t seem to matter to their investors and the customers who’ve put down deposits. When investors don’t put any more money into the company, then you will know it’s a problem.”
On a positive note, Tesla reported it used up only $277 million in cash in the fourth quarter. That was down from $1.4 billion in the third quarter. On a full-year basis, however, the company used nearly $3.5 billion in cash, more than twice the amount from 2016.
The company’s loss in the quarter amounted to $3.04 per share on an adjusted basis, slightly less than analysts had forecast, and $4.01 unadjusted.
Tesla has lost money in eight of the last nine quarters. Mr. Musk said he was “cautiously optimistic” that it would begin to generate net income in 2018, as Model 3 production and deliveries rose.
The company’s shares were little changed in extended trading after the earnings report. They had risen 3.3 percent during the regular session.
Even if Model 3 output rises, Tesla will have to spend heavily on two future vehicles — a battery-powered semi truck and another car, the Model Y.
While working on the Model 3, Mr. Musk has continued to seek new barriers to break in other areas.
On Tuesday, his other company, SpaceX, successfully launched a heavy rocket into space. It was the first time a rocket that powerful had been launched by a private company. The Falcon Heavy is carrying a cherry-red Tesla Roadster. The rocket and the car are intended to go into an orbit around the sun, where they could remain for hundreds of millions of years.
“If we can send a Roadster to the asteroid belt,” Mr. Musk said Wednesday, “I think we can solve Model 3 production.”