Tags: Elon Musk | Tesla | Model 3 | electric car

Musk's Model 3 Output Falters as Sales of Pricier Teslas Climb

Musk's Model 3 Output Falters as Sales of Pricier Teslas Climb
(Dreamstime)

Monday, 02 October 2017 05:51 PM

Tesla Inc. struggled through the first quarter producing its cheapest electric car yet, though demand for the pricier models in Chief Executive Officer Elon Musk’s lineup climbed to a record.

The automaker built only 260 Model 3 sedans during the three months ended in September, trailing the 1,500-unit forecast Tesla issued in August. Model S sedan and Model X crossover deliveries climbed to a record for any quarter, and the company said it’ll exceed first-half deliveries by several thousand vehicles in the last six months of the year.

Total production totaled 25,336 vehicles in the quarter, the first to include early output of the car that starts at $35,000 before any incentives or options. Musk has warned it would be “manufacturing hell” ramping up output of the Model 3, which gives the youngest publicly traded U.S. automaker its best shot yet at reaching mass-market consumers.

“Model 3 production was less than anticipated due to production bottlenecks,” the company said in a statement. “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.”

Tesla shares slipped 1.1 percent to $337.87 as of 4:51 p.m. in New York, after the close of regular trading. The stock has climbed 60 percent this year.

The Palo Alto, California-based maker of electric cars and energy-storage devices turned over the first 30 Model 3 cars to employees at a late-night event at the company’s Fremont, California, auto plant in late July. On Twitter, Musk said that production would grow exponentially and vowed to make roughly 100 of the cars in August and more than 1,500 in September, building to 20,000 cars per month in December.

“I would be surprised if anyone was surprised that they came up short,” said Sam Korus, an analyst at Ark Investment Management in New York, which holds Tesla shares. “When Musk gives a prediction, you know it’s an extraordinarily ambitious goal.”

Tesla’s 26,150 cars and SUVs delivered in the third quarter was comprised of 14,065 Model S sedans, 11,865 Model X SUVs and 220 of the new Model 3. Initial deliveries of the Model 3 have primarily been to employees.

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Tesla Inc. struggled through the first quarter producing its cheapest electric car yet, though demand for the pricier models in Chief Executive Officer Elon Musk's lineup climbed to a record.
Elon Musk, Tesla, Model 3, electric car
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2017-51-02
Monday, 02 October 2017 05:51 PM
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