Tesla Model 3 Production Behind Target

The Tesla Model 3 is three to four weeks behind production targets, according to analysts. Buyers eager for the mass-market electric sedan will have to wait for delivery as Tesla confirmed on Monday that they face production bottlenecks. After the announcement, Tesla shares dropped over 1 percent.

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Tesla CEO Elon Musk warned employees that it would be “hell” to meet production goals when the company rolled out the first Model 3 in July. He was right. While the car was designed to be simpler and more efficient to manufacture than the company’s other models, the Model S and the Model X, the automaker admitted on Monday that certain manufacturing systems for the new car are proving difficult to implement. Tesla built only 260 Model 3s during the third quarter, less than a fifth of the 1,500 forecasted. The carmaker wants to deliver 5,000 Model 3s per week by the end of the year and 10,000 Model 3s per week in 2018 to hit production goals of 500,000 per year.


Tesla also said on Monday that overall deliveries rose 4.5 percent in the third quarter compared to the previous year. Tesla said it was on target to deliver around 100,000 Model S and Model X vehicles by the end of 2017. However, the Model 3 remains the real test for the upstart manufacturer. The new model starts at $35,000—half of the cost of the luxury Model S—and secured tens of thousands of preorders from consumers interested in an affordable electric sedan. Tesla has demonstrated consumer interest in their vehicles, but they need to deliver the goods if they want to become a mass manufacturer that can stay on top of the electric market.