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Tesla shares fell after the electric carmaker posted wider-than-projected losses as it increased spending to ramp up the production of its Model 3.
The stock of the company declined by almost 5 percent as the loss was significantly bigger than estimates.
The automaker also said the production target of its mass market electric sedan will be pushed back by around 3 months due to manufacturing bottlenecks that needs to be resolved.
Issues with Tesla's manufacturing processes have affected the production of the Model 3, a kay that is widely viewed as the main factor to Tesla's future success. Expectations for the said model have helped Tesla's stock to rally so far this year.
However, in a letter to investors, the company cautioned it anticipates to reach a production rate of 5, 000 model cars per week late in the Q1 of 2018. This is three months later than the prior estimate of reaching said figures by the end of this year.
For the third quarter, the company posted a net loss of $619.4 million or $3.70 per share. This is down from the profit of $21.9 million or 14 cents per share recorded a year earlier.
Revenue surged 30 percent to $2.98 billion, clocking in a loss of $2.92 per share.
The company flagged its adjusted gross margin would fall to around 15 percent due to a higher mix of lower-margin Model 3 deliveries in the Q4, but would regain momentum in the first quarter of next year.
