Tesla Model 3 Production Off to a Slow Start

CEO of Tesla Elon Musk is seen delivering speech at the wind and solar battery plant outside of Jamestown South

However, the company's quarterly results reveal that just 260 Model 3s were built in Q3 "due to production bottlenecks".

In a statement, Tesla said that it is significant to emphasize that there are no fundamental problems with the production of Model 3 or the supply chain.

"We see the 5k a week production goal to exit 2017 at risk given the lack of disclosure provided in fixing the "handful" of subsystems that are taking longer than expected", said Cowen and Co analysts, who already rate Tesla an underperform.

Musk handed over the first 30 Model 3 electric cars to Tesla employees at a splashy event July 28. However, the most in-demand model from the brand, the Model 3's deliveries are not up to the mark.

The increase over Q2 was a very significant 17.7 percent, but more importantly, it was also 4.4 percent better than the Q3 of 2016, which were also some very good three months for the company. Tesla delivered 47,700 Model S and Model X cars in the first half of the year.

On July, electric auto manufacturer #Tesla officially launched its latest and most affordable automobile yet, the mass-market #Model 3 sedan.


Tesla called the third quarter "our all-time best quarter for deliveries" in an investor message posted online. Before the end of next year, Tesla expects Model 3 production to achieve a weekly rate of 10,000 units.

Although X deliveries have improved throughout 2017, the Model 3 was supposed to enjoy some of the fruits of that learning process.

While Tesla has struggled to meet early production ramp ups for all of its vehicles in the past, the Model 3 in particular has extremely aggressive manufacturing goals.

Faced with "production bottlenecks", Tesla managed to produce only 260 Model 3 vehicles during the third quarter, but now it's confident of getting back on track toward a production rate of 5,000 per week. The truck doesn't appear to bear a Tesla logo, but the headlights and the profile look on point. During Tesla's second quarter shareholder call, Musk called out the arbitrary timeline of a financial quarter, saying "when you have an exponentially growing production ramp, slight changes of a few weeks here or there can appear to have dramatic changes". However, the latest production problem at Tesla can not be ignored, and it is another knock against Musk and his already long line of failures.

September was supposed to be the Model 3's big month.

However, many market analysts have started talking about Tesla losing ground to Chevrolet Bolt EV.

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