Tesla Model 3 Production Is 84% Lower Than What Elon Musk Promised
Tesla reported Monday that it produced 260 of its new Model 3 electric cars in the third quarter, of which it has delivered 220, dramatically missing CEO Elon Musk’s prediction that it would produce more than 1,600 cars by September.
In July, Musk tweeted a production update for the Model 3 vehicles, saying the car had passed all regulatory requirements ahead of schedule. After announcing that the first 30 customers would receive the Model 3s on July 28, Musk wrote “production grows exponentially, so Aug should be 100 cars and Sept above 1,500.”
Altogether, Musk predicted that third quarter production numbers for the Model 3 would be around 1,630 vehicles, which means he’s off by 84%.
Musk handed over the first 30 Model 3 electric cars to Tesla employees at a splashy event July 28. Critics have warned that the company might struggle to reach those aggressive production numbers and has caused some workers to put pressure on management to meet the demands of a union effort.
Tesla said Model 3 production “was less than anticipated due to production bottlenecks.” The company noted that a handful of manufacturing subsystems at its Fremont, Calif., factory and its Nevada battery plant have taken longer to activate than expected.
The company emphasized there are no fundamental issues with the Model 3 production or supply chain.
Overall production and delivery figures for Tesla were rosier, and showed how its flagship Model S continues to account for its biggest chunk of sales.
Here’s a breakdown of the delivery numbers:
- 26,150 vehicles were delivered in the third quarter
- 14,065 were Model S sedans
- 11,865 were Model X SUVs
- 220 were Model 3 cars
Total deliveries in the third quarter rose 4.5% from the same period last year. Deliveries were 17.7% higher than last quarter. While a nearly 18% jump sounds promising, it’s important to note why.
Tesla delivered just over 22,000 vehicles in the second quarter. At the time, Tesla said about 3,500 of those were in transit to customers at the end of the quarter. Tesla said those vehicles would be counted in the third quarter.
The same delivery bottleneck continued this quarter. Tesla said about 4,820 Model S and X vehicles were in transit to customers at the end of the third quarter. These will be counted as deliveries in Q4 2017.
Tesla says it expects to deliver about 100,000 Model S and X vehicles in 2017, which would be a 31% increase over 2016.
The company produced 25,336 vehicles in the third quarter about 1.5% fewer than last quarter. Tesla produced 25,708 vehicles in the second quarter.