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Tesla Delays Model 3 Production Target by Three Months

Steve Jurvetson/Wikimedia Commons

Tesla Inc. has announced a three-month delay in its self-imposed deadline for hitting a production target of 5,000 Model 3 electric vehicles per week.

The company had previously said it would reach the threshold sometime in 2017, then in the first quarter of this year. The latest announcement this past Wednesday puts the date off to the end of the second quarter.

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The recurring delays, while not unexpected, highlight how difficult it is for Tesla to predict its own manufacturing bottlenecks and issues with suppliers,” Greentech Media reports. Company founder Elon Musk “has long said that production of new Tesla cars occurs like an ‘S-curve,’ [2] where initial manufacturing is low and slow; when an inflection point is reached, the production speeds up dramatically. But at what point Tesla hits that inflection mark has been notoriously difficult to predict.”

In its release Wednesday, Tesla said the 2,425 Model 3s it produced in the last three months of 2017 included 793 in the last seven working days, indicating “major progress” in eliminating production problems. That translates into “over 1,000 Model 3s per week,” the company said. It expects to ramp up to 2,500 units over the next three months, then double that by mid-year.

The account of Tesla’s production woes reads a bit like a very old business adage: “Speed, quality, price. Pick two.” The Tesla release said the more gradual ramp-up will allow is to “focus on quality and efficiency rather than simply pushing for the highest possible volume in the shortest period of time,” indirectly countering past concerns that the company had shipped Model S and Model X units with hardware and software glitches.

“Beyond the Model 3, Tesla’s overall car deliveries were on target for the fourth quarter and the year as a whole. The company said it shipped 101,312 cars combined in 2017, which was up 33% over 2016, and in line with expectations,” Greentech notes. With 29,870 cars shipped and 24,565 manufactured across all models, Tesla said the last three months of the year were its “all-time best quarter” for Model S and X deliveries.