Tesla 1Q loss widens on higher spending ahead of Model 3

The company reported a net loss of $397 million, most of Tesla's losses at this point are coming from R&D and SG&A, of which a footnote shows $103 million is due to stock compensation expense.

The company's expected revenue in the current quarter to be 2.6 Billion, seeing a projected current quarter growth of 44.1%, and per annum growth estimates over the next 5 year period of around 35%.

Tesla, Inc.'s (TSLA - Free Report) adjusted loss was of $1.97 per share in the first quarter of 2017, compared with an adjusted loss of $1.24 in the year-ago quarter. The company expects capex of "slightly over" $2 billion by the time production starts on the Model 3 in July. It's also working on several other vehicles, which helps explain its 77 percent increase in research and development spending in the first quarter. It is also planning a Model Y small SUV in late 2019 or 2020.

Musk said that Tesla would also open its body fix shops "to significantly improve the customer experience with out-of-warranty body repairs". Model 3 is Tesla's economical variant which is expected to provide it with a wider market presence, and also justify its expanding valuation.

See, the bears are probably right when they point out that Tesla's shares are too expensive; that Tesla will need to raise more money; and that the Model 3 will probably eat into margins once it's released. There are already signs of internal friction: Klaus Grohmann, who founded the eponymous firm Tesla acquired, was ousted last month after clashing with Musk over strategy, Reuters reported, citing an unnamed source. In Tesla's case, all eyes are fixed upon Model 3 and whether the company will be able to keep production on schedule.

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In its update for the first quarter Tesla said its Model 3 development "is almost complete".

Tesla is planning to launch two additional trim levels of the model S sedan - 75D and 100D - in Korea, the US-based automaker said on April 30. The company plans to add nearly 100 retail, delivery and service locations globally, representing a 30% increase in facilities in the year. In addition, Tesla plans to "at least double the number of Superchargers and Destination Charging connectors globally to more than 10,000 and 15,000, respectively", the investor letter noted.

Tesla shares, which fell 2,47% in regular trading, slipped a further 0.33% after the close, trading hands at $311.02, still well above the psychologically important $300 a share support. It remains to be seen whether Tesla will go for another round of fundraising this quarter as many analysts expect it to do.

Tesla plans to boost the number of retail, delivery and service locations by 30 percent, and add its first company-owned body fix shops this year.

The California automaker last week recalled 53,000 Model S and Model X vehicles to fix an unrelated parking brake issue. The company's $50.73 billion market value remained higher than that of General Motors. But operating costs rose by $224 million sequentially, reflecting the first full quarter of SolarCity operating expenses, following its merger with Tesla.

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