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Photo: Chuck Burton / AP

Tesla shares plunged by as much as 5% in after hours trading and CEO Elon Musk was on the defensive in an earnings call as the electric-carmaker reported a $619.4 million loss today — its biggest ever. Again and again, the usually chest-out Musk told Wall Street analysts about the growing pains of ramping up to produce hundreds of thousands of cars a year, at one point declining even to forecast how many units of the ostensibly company-changing Model 3 Tesla would produce in the last quarter of the year, apart from finally saying it will be in the thousands per week.

"We are in a vertical climb here," he said of the company's ramp-up difficulties.

What is vexing Musk: Analysts regard the Model 3 as make or break for Tesla, which is spending terrific sums of money to ramp up not only the Model 3 but the gigafactory, the gigantic lithium-ion battery factory Musk is building in Nevada. Everything is on the line for Tesla. Musk either needs to get the kinks out — Tesla was supposed to be producing 5,000 Model 3s a day by the end of the year, a milestone that is now pushed out to next year — or he could see his pumped-up share price absorb a far more serious hit.

The biggest problem: Musk said battery production is the greatest bottleneck. He said one unidentified battery subcontractor had completely fallen down on the job, requiring a wholesale rewrite of a software program from scratch over a four-week period. "There's still a long way to go" to resolve battery production, he said.

  • The effect of baring his soul was to make him seem not in full control of the process at a time one might have expected him to have long-ago taken charge, especially given the gravity of the situation not only to Tesla, but to the creation of an electric car industry, which he has always said is his aim.
  • It is not too dramatic to say that, given the absence of any other electric with the enormous consumer demand enjoyed by the Model 3, the near-term future of global electric cars rides on him resolving the problems and making hundreds of thousands of more or less problem-free units of the mainstream vehicle.
  • One wonders why Musk — given that his prior S and X models were both delivered more than a year late — he didn't simply wait before delivering the Model 3 until the production facilities were ready.

Musk punts: Tesla's chief said everything will be better next year, and basically told the analysts to wait until the next earnings call, when there would be much more favorable news. A few weeks into the new year will bring "exponential growth" in Model 3 production, he said. "We're on it. It's going to take a few months longer than we expected."

Go deeper

45 million Americans under winter storm watches near New England

Computer model projection showing the winds moving around the powerful East Coast storm on Saturday Jan. 29, 2022. Image: https://earth.nullschool.net

Nearly 45 million Americans are under winter weather alerts and warnings from North Carolina to northeastern Maine, as a major winter storm threatens the region.

Why it matters: It is predicted to be the biggest blizzard since 2018 to strike the Northeast with more than 2 feet of snow possible in parts of eastern Massachusetts, according to the National Weather Service.

2 hours ago - World

Australian PM pledges $700M for climate change-threatened Great Barrier reef

A green sea turtle is flourishing among the corals at Lady Elliot island in Australia's Great Barrier Reef. Photo: Jonas Gratzer/LightRocket via Getty Images

Australian Prime Minister Scott Morrison announced Friday a AU$1 billion ($703 million) investment plan for the Great Barrier Reef.

Why it matters: The nine-year plan for projects including water quality improvement, reef conservation and supporting some 64,000 tourism jobs comes months ahead of this year's federal election. It has been criticized by scientists and environmental groups for failing to tackle climate change.

Judge nixes Gulf of Mexico oil leases in climate-focused ruling

Tug boats prepare to tow the semi-submersible drilling platform Noble Danny Adkins through the Port Aransas Channel into the Gulf of Mexico on December 12, 2020 in Port Aransas, Texas. Photo: Tom Pennington/Getty Images

A federal judge on Thursday canceled the Biden administration's late 2021 sale of new oil-and-gas drilling leases in the Gulf of Mexico.

Why it matters: The ruling that the greenhouse gas emissions analysis by the Interior's Bureau of Ocean Energy Management (BOEM) was insufficient is a win for green groups that challenged the decision, as they seek to curb fossil fuel production.