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Tesla produced fewer Model 3s than expected since launch, ‘production bottlenecks’ to blame

Tesla Model 3 production numbers

Tesla has published the first set of production numbers since Model 3 deliveries started, and let’s just get the bad news out of the way first. Tesla produced just 260 Model 3s in Q3 2017, about half what was expected. That’s bad news for the company’s stock price in the near future, and more proof that producing cars is, in fact, hard.

But Tesla is stressing that the short-run production “bottlenecks” don’t mean that the Model 3 is doomed. Tesla has published hugely optimistic Model 3 production forecasts in the past, and it still seems to be sticking by them.

In a statement, Tesla blamed the delays on a “handful” of systems causing “bottlenecks”:

Model 3 production was less than anticipated due to production bottlenecks. Although the vast majority of manufacturing subsystems at both our California car plant and our Nevada Gigafactory are able to operate at high rate, a handful have taken longer to activate than expected.

It is important to emphasize that there are no fundamental issues with the Model 3 production or supply chain. We understand what needs to be fixed and we are confident of addressing the manufacturing bottleneck issues in the near-term.

For reference, Tesla originally anticipated producing 20,000 Model 3s by the end of the year. In 2018, that number is set to double to 40,000 units per year. Musk previously said that the company is about to enter “production hell,” and it seems that he wasn’t lying.

The one good piece of news for Tesla is that it’s set to beat expectations on the existing car range. “We had previously indicated that second half Model S and X deliveries would likely exceed first half deliveries of 47,077, but we now expect to exceed that by several thousand vehicles,” the statement says. “In total, we expect to deliver about 100,000 Model S and X vehicles in 2017, which would be a 31% increase over 2016.”