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As Model X and Model S sales soar, Tesla is still struggling with Model 3 production

Published Jan 4th, 2018 2:33PM EST
Model S and Model X

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Tesla’s inability to meet production deadlines is a reputation the company deservedly can’t shake. Even though Tesla executives promised that things would be different with the Model 3, Tesla this week revealed that it was once again pushing back its production schedule for the Model 3. Specifically, Tesla is now aiming to manufacture 5,000 Model 3 units per week by the end of June. Previously, Tesla was hoping to reach the 5,000/per week rate by the end of March. And before that, Tesla claimed it would be able to reach that threshold by December. In short, Tesla’s initial Model 3 production goal is about six months behind schedule.

“As we continue to focus on quality and efficiency rather than simply pushing for the highest possible volume in the shortest period of time,” Tesla said in a press release, “we expect to have a slightly more gradual ramp through Q1, likely ending the quarter at a weekly rate of about 2,500 Model 3 vehicles. We intend to achieve the 5,000 per week milestone by the end of Q2.”

The good news, though, is that production improvements are being made. During the company’s third quarter, Tesla manufactured 260 Model 3s. By way of contrast, Tesla during the recent holiday quarter bumped up production to 2,425 units. What’s more, Tesla said that it saw an appreciable increase in Model 3 production rates towards the end of 2017. Currently, Tesla claims that production stands at about 1,000 units per week. While that’s clearly not where Tesla wants to be, it’s certainly an encouraging step in the right direction.

The Model 3 notwithstanding, Tesla did manage to enjoy a successful quarter overall; the company delivered more than 29,800 vehicles over the past three months, setting an all-time quarterly record in the process. For the year gone by, Tesla delivered 102,432 vehicles, a solid increase from the 83,922 vehicles it delivered in 2016. And factoring the Model 3 out of the equation, Tesla notes that Model S and Model X deliveries alone grew by 33%.

While investors certainly won’t look at another Model 3 production delay favorably, they may at the very least find solace in the fact that interest in the Model S and Model X is higher than it’s ever been.

Yoni Heisler Contributing Writer

Yoni Heisler has been writing about Apple and the tech industry at large with over 15 years of experience. A life long expert Mac user and Apple expert, his writing has appeared in Edible Apple, Network World, MacLife, Macworld UK, and TUAW.

When not analyzing the latest happenings with Apple, Yoni enjoys catching Improv shows in Chicago, playing soccer, and cultivating new TV show addictions.

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