On July, electric car manufacturer Tesla officially launched its latest and most affordable automobile yet, the mass-market Model 3 sedan. Starting at a baseline price of $35,000, the Model 3 was a bold step towards encouraging more people to try electric power for their transportation. Tesla had a production plan that would see their manufacturing facilities build 1,500 Model 3 units in the third quarter of 2017 – July to September – with the end goal of 20,000 in production by December. These are lofty figures, and in the end, the company founded by Elon Musk, was unable to meet even its Q3 production quota, to their detriment at the stock market.
Disappointing Model 3 numbers
Tesla planned to have 1,500 Model 3 sedans off the assembly lines by the end of September. It is now October and, as it turns out, the company fell drastically short of their expectations. The total number of units they have built thus far is 260 or less than 83% of their target for the Model 3. No sooner had the news come out that shares of Tesla went down by 1.5% in after-hours trading. The company tried to soften the blow by highlighting the new delivery records for finished units of their older electric cars, the Model S sedan and the Model X SUV.
One weakness perceived by analysts of Tesla’s manufacturing capability is in the ramping up of production volume.
Both the Models S and X had slower-than-advertised rollout schedules when they first launched. Autotrader analyst Michelle Krebs opines that it will only get worse with the Model 3, the first vehicle that Tesla will produce for the mass market. CEO Elon Musk had in May predicted that Model 3 rollout in 2017 will eventually reach 5,000 weekly, a bold forecast that has not materialized.
Grandiose promises
A maverick startup company founder, Elon Musk has been in the habit of making grand promises for what his various outfits – Tesla, SpaceX and Hyperloop among them – can do in the future. Among his company goals are for SpaceX to start a space colony on Mars by 2022, and for the development of Earth-use rockets that could ferry passengers, like from New York to Shanghai in 39 minutes.
Musk himself has admitted his tendency to over-sell his projects.
That said, while the Model 3 production has not gone up to snuff, existing manufacture of Tesla’s previous models did deliver in numbers. Both the Model S and X together account for over 25,000 units made in this Q3, and Musk hopes to see that number reach at least 100,000 across all quarters when 2017 ends.
