Why Tesla Model 3 production seems a little low

It appears as if the thousands of customers who ordered their Tesla Model 3 cars will have to wait a while longer as the company blames "production bottlenecks".

Tesla had stated in its second-quarter monetary report that it expects "to attain a rate of 5,000 Model 3 vehicles weekly by the end of 2017".

Tesla also added that there are no fundamental issues with the Model 3 supply chain or production so things should improve in the coming months, hopefully. In July, it began production of the Model 3, which starts at $35,000 - half the starting price of the Model S.

Musk has no more than a few weeks to solve his Model 3 production problem.

As for the other two Tesla variants - Model S and Model X - the company achieved its "all-time best quarter" in terms of deliveries. To increase the daily delivery rate from 276 a day in the first three months of the year to 288 in the last three months, Tesla has suffered negative cash flow of about $13 million a day.

The moves also followed a series of announcements by rival General Motors on its own electric auto ambitions, which included a promise to take "bold steps" toward the first completely driverless vehicles.

Tesla announced its third quarter output today, and it's somewhat of a mixed bag.

Tesla attributes the lower-than-expected figure to production bottlenecks.

The Model 3 has become Tesla's most anticipated vehicle, garnering hundreds of thousands of preorders due to its promise of a mid-30K base price and a range well over 200 miles, not to mention premium auto features and style.

People queuing to order the Tesla Model 3.

Tesla says it built 25,336 vehicles - 260 of them Model 3 sedans - in the 3rd quarter of 2017.

On Wall Street, Tesla bulls were undeterred while skeptics effectively said "Told you so". "We continue to maintain our more cautious Model 3 ramp, which is far below company targets".

Panasonic usually manufactures the battery cells for Tesla's Powerpacks, but Tesla chose Samsung as the supplier for this particular project, Nikkei Asian Review reported.

Musk delivered only 220 Model 3s during the fourth quarter, all of which went exclusively to employees and investors and fall well below the 1,300 that analysts surveyed by FactSet expected on average. It shows a modern looking truck which is quite similar to the teaser image Tesla had released in April.

Related:

Comments

Other news