Tesla cites 'bottlenecks' on low Model 3 output numbers

Elon Musk Powerpack pladge

Tesla announced today that they'd delivered 26,150 vehicles in the third quarter of this year.

"The volume production of Model 3 was lower than expectations due to bottlenecks in production", - it is spoken in the message of Tesla. Missing guidance by about 85 percent sends most companies' shares into a tailspin, but Tesla stock rose as much as 2 percent Tuesday.

Tesla says this low rate is due to "production bottlenecks", attributing the issues to delays in activating a number of its manufacturing subsystems in its California vehicle plant and Nevada Gigafactory, which are normally "able to operate at high rate".

The current quarter is likely to come under heavy scrutiny for evidence that Tesla has dealt with manufacturing/supply chain issues and is rapidly raising output of the Model 3. The company said it understands what needs to be fixed and is "confident of addressing the manufacturing bottleneck issues in the near-term". That means that Tesla's vehicles-per-worker-per-year ranged between 8 and 14, or about one-seventh the efficiency of NUMMI two decades ago. In the third quarter, Tesla only managed to make 260 copies, less than the 1,500 units projected back in August. "Our 2018 target of [120,000] Model 3 deliveries continues to bake in high levels of uncertainty around future production bottlenecks".

Early versions of the Model S and the Roadster also faced criticism for having various issues, which were smoothed out in later iterations of the cars.




Model 3. Image source: Tesla.

The auto firm has also said that it expects to achieve "a rate of 5,000 Model 3 vehicle per week by the end of 2017".

Musk's master plan was built on sales of more expensive cars to finance the production of a mass-market vehicle, and the company's top-of-the-line Model S and Model X performed better than expected in the third quarter.

More than 500,000 people are on a waiting list to get a Model 3.

Model 3 only started production in July and orders have topped 450,000 vehicles, he said. The remaining 220 were Tesla's recently launched Model 3. Before the end of next year, Tesla expects Model 3 production to achieve a weekly rate of 10,000 units. By 1997, 4,844 NUMMI workers produced 357,809 vehicles, or 74 vehicles per worker per year.

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