Tesla Falls Behind on Model 3 Production in Q3

Share

A California-based company, the Palo Alto just delivered Model 3 sedans of 220 numbers, and during the quarter it produced 260.

"It is important to emphasize that there are no fundamental issues with the Model 3 production or supply chain", said Tesla in a statement.

Shares of Tesla fell 1.5% in after-hours trading after the company released the news.

On Monday, Tesla also mentioned that quite a few systems in its vehicle plants took longer to activate than it was expected.

Pitbull sends in private jet to ferry cancer patients from Puerto Rico
Barea and owner Mark Cuban to the list of heroes who have come to the rescue of victims of recent horrific hurricanes. MacMahon noted that Brea is the only active National Basketball Association player who's a Puerto Rico native.

Tesla told investors the disappointing numbers are due to "bottlenecks" in production, and the company should be able to correct those bottlenecks. "We understand what needs to be fixed". Tesla has disrupted the global auto industry with its stylish electric cars, but it now faces growing competition from the likes of Daimler AG, Volkswagen AG and General Motors Co.

Musk has said that production of the Model 3 will grow exponentially and had tweeted Tesla would make roughly 100 of the cars in August and more than 1,500 in September. "Automotive gross margin estimates for the quarter given worse utilization on Model 3 and likely lower margin Model S/X sales", he wrote.

Tesla also raised its forecast for second half Model S and X deliveries. Both the Model S and Model X have followed similar trajectories. That's way short of the 1,000 units target set by the company, with blame falling on "production bottlenecks". Total orders for Tesla's Model 3 tumbled earlier this year to 455,000 from a high of 518,000. The market would rather see the Model 3 produced well than have it rushed out quickly to meet delivery targets, said Morgan Stanley analyst Adam Jonas. Musk warned after handing over the keys to the first Model 3 owners in July that it would be "hell" ramping up output of the vehicle, which racked up nearly half a million reservations as of early August. About 4,820 Model S and Model X vehicles were also in transit during the third quarter, and they will be counted toward the total deliveries in Q4 2017. The remaining 220 were Tesla's recently launched Model 3. "We expect Model 3 to have a breakout year in 2019".

Tesla ultimately expects to deliver about 100,000 Model S and X vehicles in 2017. While GM has built 130 self-driving Chevrolet Bolt electric vehicles, all Tesla cars produced since October previous year have included self-driving technology.

Share