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Tesla misses Model 3 production targets

First Model 3 deliveries. Source: Tesla

260 vehicles produced in September, much lower than the 1,500 expected

Deliveries of the EV world’s most-desired car, Tesla’s Model 3, during the third quarter of 2017 have been disappointing.

The mass-market sedan saw 220 deliveries, whereas Wall Street expectations had been at 300-400.

Production was even further behind, with just 260 units produced – less than a fifth of the 1,500 the company planned to complete during September.

In July, Elon Musk had brashly said the Californian electric vehicle company would have production of 100 cars in August, 1,500 in September, growing exponentially to 5,000 weekly in December and an eye-popping 10,000 weekly by the end of next year.

The company cited production bottlenecks, commenting in a statement that: “It is important to emphasize that there are no fundamental issues with the Model 3 production or supply chain… We understand what needs to be fixed and we are confident of addressing the manufacturing bottleneck issues in the near-term.”

Analysts have more the most part taken this as normal for a young car company producing a new car. Indeed, while some expected a plunge in share prices, Tesla stock seemed to largely shrug off the worries.

Overall, Tesla delivered 25,150 vehicles in the third quarter, including its popular luxury Model S and the Model X.

The first Model 3 mass-market cars had rolled off the production line in July. The price-tag on the EV starts at only US$35,000. Potential customers have been able to pre-order it since March 2016.

That production is behind schedule may not surprise Musk, who already forecast months of “production hell” at the Model 3’s unveiling. Yet the company should also take heart – the same quarter was an “all-time best” for Model S and X deliveries, it said in its investor note. And with thousands of Model 3 reservations to fill, there will be no shortage of customers.

As the adage goes – “If you’re going through hell, keep going.”

 

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