Tesla misses Model 3 delivery target due to ‘production bottlenecks’

Model 3

The first Tesla Model 3, gifted to CEO Elon Musk by a board member. Photo: Tesla Motors.

Tesla says it expects the supply chain issues to be resolved in the “near-term”

Tesla Motors announced Monday that it produced only 260 Model 3 electric vehicles in the third quarter, far short of the 1,500 forecast and just the latest of the company’s missed production forecasts.

Tesla Model 3

Tesla Motors founder Elon Musk.

The company delivered 26,150 vehicles during Q3: 14,065 Model S, 11,865 Model X, and 220 Model 3, Tesla said in a press release.

“This was our all-time best quarter for Model S and X deliveries, representing a 4.5% increase over Q3 2016, our previous best quarter, and a 17.7 per cent increase over Q2 2017,” the release said.

The company had previously indicated that second half Model S and X deliveries would likely exceed first half deliveries of 47,077 and it now expects to exceed that by several thousand vehicles.

It expects to deliver about 100,000 Model S and X vehicles in 2017, a 31 per cent increase over 2016.

About 4,820 Model S and X vehicles were in transit to customers at the end of the quarter, which will be counted as Q4 deliveries.

Q3 production totaled 25,336 vehicles, with 260 of them being Model 3.

Tesla says Model 3 production was less than anticipated due to “production bottlenecks.”

“Although the vast majority of manufacturing subsystems at both our California car plant and our Nevada Gigafactory are able to operate at high rate, a handful have taken longer to activate than expected,” it said in the release.

The company says there are no fundamental issues with the Model 3 production or supply chain, that it understands what needs to be fixed, and is confident of “addressing the manufacturing bottleneck issues in the near-term.”

“Production should continue to ramp and we believe Model S and X demand remains strong,” wrote Ben Kallo, a senior research analyst at Baird in a Tuesday note. “We would be aggressive buyers on any weakness.”

Kallo noted strong demand for Tesla’s products, according to Dow Jones Newswires, and upcoming new product launches including a Semi Truck, and announcements about new technologies such as Tesla Energy.

Shares in the company have gained 60 per cent in the year-to-date, compared to a 13% gain for the S&P 500.

Model 3

Posted in: News

Post a Comment