News Worms
News Worms

Tesla Confirms Model 3 Shortfall

Tesla Model 3 production target has been missed by a significant margin which could be problematic for the electric auto manufacturer.

Electric carmaker Tesla revealed on Monday that it has missed its initial shipment goal for the new Model 3, the company's first lower cost, more mainstream electric vehicle. A "handful" of its manufacturing machines have taken longer to move into a higher production rate than expected, said the company.

Production of the new Model 3 has run into some snags, according to Tesla.

"In our opinion, quality and attractiveness of early production is far more important than the quantity delivered - at least for now", he said Tuesday in a note to clients, adding that "most auto launches have hiccups, and Tesla is no exception".

While Model S and Model X deliveries are breaking records, portraying a 4.5 percent increase from Q3 2016 and a 17.7 percent growth from Q2 2017, the Model 3 is way behind with production figures at 260 and delivery at 220.

The announcement made late Monday is another sign of the challenges the upstart electric vehicle maker may face as it tries to build a more affordable electric auto - a basic version of which priced at about $35,000. The company officially began deliveries of the Model 3 on July 28.

Tesla announced it fell far short of its plan to build 1,500 of its first mass market vehicle, the Model 3, in the third quarter.

All told, Tesla delivered 26,150 vehicles during the July to September quarter. Musk said Tesla's key advantage in building all-electric vehicles was limiting the number of moving parts.

The Model 3's success is critical, demonstrating that Tesla can cultivate a much wider market for its vehicles - going up against increasingly electrified incumbent automakers over time - and that the manufacturing prowess of which CEO Elon Musk has boasted repeatedly is real.

During second quarter, Tesla reported slightly better results as the company booked $100 million in ZEV credit sales. Tesla produced 25,708 vehicles in the second quarter.

Model 3. Image source: Tesla.

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


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