Shares of Tesla (TSLA) were falling in after-hours trading on Wednesday after the electric automaker reported mixed third-quarter financial results.

For the quarter, Tesla posted an adjusted earnings loss of $2.92 per share on revenue of $2.98 billion. Analysts were projecting an adjusted earnings loss of $2.29 per share on revenue of $2.95 billion.

Shares of Elon Musk's electric car maker dropped 4.3% to $307.20 in after-hours trading Wednesday. Shares of Tesla were higher over 50% year-to-date coming into the report. 

"Judged as a car company, Tesla is currently producing a tiny volume of cars in unpopular segments with an uncompetitive unit cost for the mass market," wrote Moody's Analytics Managing Director and Senior Auto Economist, Tony Hughes, following the report. "Residual prices and sales data clearly show that American consumers want to drive trucks and large SUVs powered by cheap gasoline, not small electric sedans...Tesla needs to quickly learn how to produce cars cheaply or face massive sunk costs in its nascent energy storage business."

In its report, Tesla touted its expanding fleet of electric vehicles, even as it pushed out some of Musk's targets for the mass-market Model 3.

"In Q3, we delivered the 250,000th Tesla," Tesla wrote in its letter to shareholders. "This is a significant milestone as the Tesla fleet is now about 100 times larger than it was five years ago, just before the launch of Model S."

The Model 3 is still an issue.
The Model 3 is still an issue.

Tesla expects production of the up-market Model S and Model X SUV to drop 10% from the third quarter to the fourth quarter, as it shifts workers to Model 3 production.

Musk had already warned investors in early October that Model 3 production would come in well below expectations. The company churned out just 222 Model 3s in the third quarter, in line with Tesla's October guidance but well below the 1,500 the company had previously expected.

"While we continue to make significant progress each week in fixing Model 3 bottlenecks, the nature of manufacturing challenges during a ramp such as this makes it difficult to predict exactly how long it will take for all bottlenecks to be cleared or when new ones will appear," Tesla wrote.

The company also pushed back production targets, now expecting to reach production of 5,000 Model 3 vehicles per week by late in the first quarter of 2018. Previously Musk indicated that he expected to cross the benchmark in the fourth quarter of 2017. The company said it will provide an update on fourth-quarter output in "the first few days of January."

Tesla had $3.5 billion in cash at the end of the third quarter, which the company said would carry it through to production of 5,000 Model 3s per week.

Meanwhile, Tesla is helping out in Puerto Rico in the aftermath of Hurricane Maria. "In response, we have sent solar panels, Powerpacks and hundreds of Powerwall energy storage systems to Puerto Rico," the company stated.

Updated from 4:22 p.m. with additional information and analysis.

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