Tesla Motors falls behind in Model S production, issues more shares
Can't seem to get anything out of the door but paper
Quality control and supply issues have slowed down the production of Tesla's Model S sedan, as the firm tries to avoid the fate of Fisker's Karma.
The company, owned by Tony Stark inspiration Elon Musk, said in a filing today that there was a hold-up in its assembly line that would hit its expected revenue this year.
"To produce a vehicle that meets our quality standards requires us to carefully analyse each step of our production ramp, improve the efficiency of our manufacturing processes and continue to train our employees," Tesla said.
"Our suppliers also must produce new products in sufficient quantities and quality levels to meet our increasing demand. Certain suppliers have experienced delays in meeting our demand and we continue to focus on supplier capabilities and constraints."
Fisker's Karma, the other celebrity-loved high-end plug-in car, has been plagued  by quality issues including two recalls and two cases of spontaneous sedan combustion that are still being investigated and rumours are rife that it was rushed to market.
Tesla is now expecting revenue of $400m to $440m down from $560m to $600m because of the decrease in the number of vehicles that will get shipped. The firm said 200 to 225 Model S cars would go out in the third quarter and between 2,500 and 3,000 in the fourth quarter.
The newly straitened finances may require the firm to renegotiate its loan agreement with the US Department of Energy, something it's already done once before.
"For the quarters ending September 30, 2013 and December 31, 2013, we currently anticipate that without taking advantage of additional revenue opportunities or making adjustments to our spending, we expect that we will need to seek an amendment from the DOE to modify the fixed charge coverage ratio covenant," Tesla said.
"Moreover, we currently anticipate that without raising capital in addition to this offering, we would need to seek an amendment from the DOE to modify the total liabilities to stockholder equity covenant for the quarters ending March 31, 2014 and the two subsequent quarters."
The company announced in a separate filing that it was going to put another 4.34m shares on the market, of which Elon Musk has already offered to buy 33,311 for $1m.
Tesla is hoping to raise a total of $128.3m in the stock sale or $147.6m if underwriter Goldman Sachs exercises its option to buy additional shares. The expected capital would come from shares at around $29.50 a pop, but Tesla's shares today are hovering around $28.40. ®