Tesla says its Model 3 production nightmare is almost over

06 January, 2018, 01:41 | Author: Patty Aguilar
  • By almost every metric Tesla massively missed its super-aggressive production target of its Model 3 for the final quarter of 2017

Tesla initially intended on reaching this mark at the end of December.

That number fell well short of Elon Musk's promise of producing 20,000 Model 3 sedans per month beginning in December.

Tesla shares recouped some of their losses on Thursday after falling as much as 3.6 per cent, a day after it pushed back a production target for its much-anticipated Model 3 sedan yet again.

A Tesla Model S vehicle is seen in a showroom in Santa Monica, California, US, January 4, 2018. These include the construction of new factories, the buildup of the solar and battery business, and the introduction of new models, such as the Tesla Semi, Roadster and Model Y.

The company burned through $1.1 billion in capital expenditures in its third quarter and said in November that fourth-quarter capex would also be about $1.1 billion.

The Drive editor Alex Roy used Tesla's new Model 3 to drive from Redondo Beach, California to Manhattan, New York in 50 hours, 16 minutes, and 32 seconds.


Tesla is burning billions in cash as it struggles to achieve its vision of mass-market electric cars powered by Tesla-brand solar roofs through Tesla-brand home storage batteries. Tesla delivered 103,082 cars in 2017, a 36% increase over 2016.

The Model 3 notwithstanding, Tesla did manage to enjoy a successful quarter overall; the company delivered more than 29,800 vehicles over the past three months, setting an all-time quarterly record in the process. "But I would not question their ability to finance at this point".

Analysts said on Thursday they continue to believe that sales of the Model 3 sedan could transform the niche automaker into a mass producer, giving it an edge over a host of rivals such as General Motors and BMW who are entering the nascent electric vehicle market.

"We think there is even room to hold off returning to the capital markets if the new schedule goes slightly slower than expected", he said in an email.

Tesla shares, despite paring some gains from a high of $385 in September, still trade at 46 percent above their price a year ago.

But the company has so far has pushed back its target of making 5,000 Model 3's per week twice. The company said it made significant progress on speeding up manufacturing of the sedan late last month, producing 793 units in the last seven working days. Tesla said it was its "all-time best quarter" for combined Model S and Model X deliveries. Critics point out that the company's unprecedented rush to ramp up production puts it at risk of delays and costly recalls if quality issues arise.

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