Friday, 15 December, 2017

Tesla falls short on Model 3 production

Tesla Model S  X/3 Deliveries – through September 2017 Tesla Model S X/3 Deliveries – through September 2017
Kristine Garrett | 04 October, 2017, 03:42

Tesla shares rose just over 1 percent in midday trading in NY. It didn't help that Tesla has gotten yet another poor review from Wall Street.

The brokerage affirmed its "underperform" rating on the stock. That's because Tesla has not yet revealed how it plans to solve these production bottlenecks.

In its 1985 initial year production ramp-up, NUMMI employed 2,470 workers to produce 64,764 vehicles, or 26 vehicles per worker per year. It's the first mass-market electric vehicle that the company has ever released. Given that 30 were delivered in July, that implied a weekly run rate of at least 170 by the end of September-and actually more than that, if production was truly following an S-curve, as per Tesla's guidance.

Firstly, Model 3 production was a complete miss.

Investors are missing the big picture with Tesla by worrying about rounding errors on whether Tesla missed or beat delivery guidance by 1,000 units.

Tesla Model 3
Tesla Model 3 was held back by a “manufacturing bottleneck” in Q3

Tesla delivered 14,065 Model S and 11,865 Model X units. However, it is quite bad to see just 260 Model 3 units being produced, considering how this new vehicle is supposed to be easier to manufacture than previous models. "Although the vast majority of production subsystems in the factory in California and Nevada Gigafactory can operate with higher load, commissioning some of them took longer than expected". While GM has built 130 self-driving Chevrolet Bolt electric vehicles, all Tesla cars produced since October past year have included self-driving technology. While the vehicle was only expected to represent a fraction of Tesla's total revenue in Q3, the automaker expects the lower-priced vehicle's production to soar in the coming quarters. Musk said Tesla's key advantage in building all-electric vehicles was limiting the number of moving parts.

"Most auto launches have hiccups, and Tesla is no exception", Jonas said.

In its quarterly statement, Tesla blamed "production bottlenecks" for the hold-up.

Instead, Tesla indicates that the company is confident in addressing the known bottlenecks. Munster forecast a "breakout year" for the new sedan in 2019. Should TSLA stock be down more? Tesla has skipped numerous incremental steps used by established carmakers when launching new products. The company is known to be working on a downsized SUV, a new Roadster and an electric pickup.

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