Tesla misses production goal of 2,500 Model 3s a week

Photo by James Bareham / The Verge

Tesla officially missed its goal of making 2,500 Model 3 vehicles a week at the end of the first financial quarter of this year, according to numbers announced today by the company. It will start the second quarter making just 2,000 Model 3s per week, but the company says it still believes it can get to a rate of 5,000 Model 3s per week at the midway point of the year.

CEO Elon Musk set these targets for the company late last year after it became apparent that Tesla was going to miss his original goal of making 5,000 Model 3s per week by the end of 2017. Along with being more affordable, the Model 3 represents Tesla’s first attempt at creating a car at mass-market scale. Production of it is eventually supposed to outpace that of the Model S or Model X, which Tesla currently makes at a much higher rate.

In total, Tesla has made 9,766 Model 3s since the beginning of 2018. A sizable chunk of those — 2,020 — came in the final week of the quarter, a figure that backs up recent reports that the company hurried to increase production to meet Musk’s target. Employees who work on the company’s other cars were reportedly asked in a recent internal memo to help increase production of the Model 3, which would help “prove a bunch of haters wrong.”

“Given the issues it has had to date, it is certainly an achievement for Tesla to complete 2,000 cars in a week, more so if they can do it 2 weeks in a row,” Sam Abuelsamid, senior analyst for Navigant Research, told The Verge in an email. “However, at this stage we don’t actually have the necessary evidence to say that they have reached a 2,000/week production rate. That statement can only be made when Tesla is consistently starting assembly of and completing a similar number of cars per week.”

Musk, who is famous for setting (and missing) ambitious deadlines for the companies he runs, reportedly took over Model 3 production in the last week to help keep up the new pace. Tesla’s board and shareholders recently approved a $2.6 billion compensation plan to keep him in charge for the next decade, with the payouts tied to whether or not the company hits a number of milestones that increase its valuation.

Tesla says 8,810 Model 3s have been delivered to customers since the start of the year, which means it is still a long way from fulfilling a preorder list that has around 500,000 customers. But the company claims in today’s announcement that, while some customers are canceling their orders because of the delays, it’s taking on enough new ones to keep the total number of reservations stable.

Tesla has had trouble making the Model 3 because of production bottlenecks that affected its ability to make batteries for the new car at the company’s Gigafactory facility. According to today’s announcement, though, the company thinks those problems are being mitigated. While the current rate of production is behind where Musk wanted it to be, Tesla says it only got here in the first place by “addressing production and supply chain bottlenecks,” and confirmed that it had to briefly shut down its factory to upgrade equipment in order to get to this point.

In a late-night email sent by Musk this past weekend, the CEO told employees that “[i]t has been extremely difficult to pass the 2000 cars per week rate for Model 3, but we are finally there. If things go as planned today, we will comfortably exceed that number over a seven-day period!”

The announcement of Tesla’s Model 3 production rate comes at a time when the company is facing scrutiny on all fronts. Its semi-autonomous Autopilot feature is the focus of a National Transportation Safety Board investigation into a fatal crash that happened last month. The company’s stock experienced its worst month in seven years, and Moody’s downgraded its debt. Tesla also recently announced a voluntary recall of 123,000 early Model S sedans.

While Tesla missed Musk’s target, the addition of the Model 3 to Tesla’s lineup means that the company’s production rate in the first quarter of this year jumped 40 percent from the final quarter of 2017. The company’s stock was up slightly in early trading.

Comments

It’s like all the "haters" were right; Elon should have been focused on the Model 3 instead of trucks and shooting a car into space and making a new roadster that nobody will buy.

Ohh Almighty foreseer, please tell me if I’m gonna win the lottery next week, please please

do you know how much they make from shooting rockets into space?
lack of vision is strong with you

I think that rocket probably would have continued on it’s mission with payload even if Elon was focusing on the model 3…

What a stupid comment.

Elon knew exactly where the focus should be. But sometimes, things are simply out of your hands, no matter how much resources or time you put on said things. So he felt he could do was to maintain the hype with those other things and distract the crowd’s attention away from the Model 3 for a bit.

Or maybe we shouldn’t subscribe to ‘cults of personality’ in tech?

But didn’t you know that solely Elon himself is capable of ramping up Model 3 production? If He isn’t paying attention to it, surely it will fail, but if He does, then surely it will succeed.

Yes! Send the world class prototype and design team to the stations! It turns out everyone can and will run a factory at any position! GENIUS!

SpaceX shot a Tesla to space. NOT TESLA!

It’s like the "shorts" were wrong and are putting out as much FUD in a desperate attempt to delay the burning of their cash that begins when Model 3 reaches profitability at 5000 cars per week production at the end of Q2. The reality is the risk of large scale preorders leaving is gone with cars being on the market and the fear of the unknown issue gone. From here it’s just upside as production ramps. No one is yet in the market to compete, and no one has announced production of this volume of cars for at least another 2 years.

At that point their cash cows will be enough to fund future. I’m guessing they’ll wait through Q3 without much large scale investment so they build confidence. Then raise more funds to accelerate build the Model Y factory designed for 1 million cars per year.

I don’t really think you can consider it FUD. They still haven’t hit their goal. They magically managed to produce 2k vehicles in the last week of the quarter. They had to slow down and halt Model S and X production to hit that 2k. Their bonds are being sold for eighty-eight cents on the dollar. They have 2.5’ish billion in unpaid debt. A lot of which, I imagine, is money owed to their own subsidiaries. They have a few hundred million, maybe more/can’t remember, worth of bonds that are ‘due’ this year. They still aren’t profitable. Etc.

Note: I’m not saying they didn’t produce 2k vehicles when I use the term magically. I am saying they aren’t going to do it again, this week. And I don’t own Tesla stock, so don’t troll me for being honest. The good news in all of this is we do know that they are capable of pumping out 2k in a week. But that’s about it.

Your forgot the real kicker: Tesla is fast approaching the limit on EV cars manufactured you can get a government subsidy for. There’s a hard limit.

They squandered the head start and now Tesla cars will be more expensive to produce with no government handout, while the competitors will be receiving that subsidy on every EV manufactured.

Yeah everything after missing yet another goal will be sunshine, lollipops and rainbows. Seriously how can you come to such a conclusion? How can you honestly have confidence in the 5000 number that is just a quarter away after they’ve so poorly missed their own estimates and the revisions to those estimates?
And don’t sleep on the competition, that’s how companies like Tesla disappear. Their competition isn’t a small start-up it’s VW, GM, Honda and Toyota. And they have the cash and infrastructure to go all-in once they find a way to make EV’s profitable.

Tesla will be lucky to get to 4000 cars a week by the end of the year.
That may not happen until they double the number of lines producing cars.

But that may be good enough.

Still don’t understand the hate that Tesla gets over production. I mean, so they’re having a tough time building their very well designed products. Every other manufacturer with 100 years of experience is very good at turning out their crap boxes. Is that preferable?

The reason supply can’t meet demand is because the other crap that’s been on the market for decades. that’s not their fault.

Biased much? Tesla doesn’t have a good reliability track record. Massive panel gaps, misaligned panels in the IP, cheap materials, and the use of non automotive grade components are the culprit. Once this car is truly mass market, if ever, and regular people start buying them we will better understand consumer satisfaction. Satisfaction surveys are stellar with Teslas the same as Porsches but doesn’t mean the latter is actually reliable either.

Wow, one weak Tesla excuse after another. What is very well designed? You must have low standards. For the amount of money you pay for their cars, they have had long lists of issues. Other manufacturers don’t have all these issues.

If Tesla can’t get its act together, it’ll be left in the dust as the others start cranking out their own electric cars which could be overall better.

The way it’s going, you may not get your Pre-ordered Tesla 3 until 2020 or later. Tesla sets these goals, and yet hasn’t hit a single one of them yet after many. They are doing it to themselves. It’s ALL, 100%, their fault.

give me a break, when the other car manufacturers make at-least 1/4 of what tesla makes then we’re talking. until then tesla can have as many delays as they can afford technically speaking. Yeah it’s not as fast as everybody wants, specially as they wanted, but as someone who has a startup and invests into research and new fields, inventing an industry from ground up is not easy job and hiccups appear all the time. As in terms of quality, these are first generation cars. Further down the line they’ll get better. I don’t think first generation bmw cars were that excellent either. Tesla will be fine despite all this hate they get all the time. They got hate with the first roaster, they got with model 5, with the model x, and now 3.

Umm. GM and Nissan both are producing more than 25% of the Mod3. With Nissan nearly matching.

With Nissan nearly matching.

Google "nissan monthly ev sales," click the first link. You will see that in 2018. Tesla has sold 8,180 Model 3’s, 5300 Model S’s, and 4500 Model X’s for a total of ~18,000 EVs. Nissan sold 2,545 Leafs and GM has sold 4,375 Bolts.

I don’t see why you should be singling out the Model 3s. It’s not like Nissan or GM couldn’t have come out with multiple EV’s at once with their massive production infrastructure, right? Looks at the 2018 monthly ramp up for the eight year old Leaf (150, 895, 1500), or the Bolt (1177, 1424, 1774). Either GM or Nissan can’t make an EV quickly enough, or they can’t make an EV people actually want to buy compared to the Model 3 (1875, 2485, 3820).

Tesla definitely is having problems making EVs… so I wouldn’t buy Tesla stock, but it’s not like the other companies are doing a great job either.

You’re US only on those numbers. I specified mod3 because this is a mod3 article. Though re-reading the comment, I see they didn’t specify. Nissan is producing the Leaf out of two factories. UK production is higher than the Smyrna factory. And Nissan can’t make them quick enough. Not sure if battery constraint or production times, but I would venture a guess at batts. Seeing as they cannot make a long range version yet.nBolts are backordered also… depending on where you’re at in the world.

So what’s wrong with the GM Bolt, again?

Oh right, "it’s ugly." For some reason, that’s the only criticism anyone ever has of that car, and yet it matters more than literally everything else to them.

Elon hasn’t personally caressed the seats with his naked body like he does with every Tesla.

Shouldn’t aesthetics matter for a car you’re going to have for 10+ years? Of course you’d rather have something sleek looking instead of some econo-box.

I don’t know about you, but typically I prefer to be inside my car when I’m driving it.

And the hatchback form-factor is practical as hell for people who use their cars to facilitate fun activities in the real world on weekends, rather than just spending the weekend detailing it in the driveway.

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