Investors are so focused on whether Tesla missed its delivery numbers on the Model 3 that they failed to see that the company had delivered a total of 26,150 cars in the third quarter: 14,065 Model S cars and 11,865 Model X's.
"It is important to emphasise that there are no fundamental issues with the Model 3 production or supply chain", Tesla continued. The real test for the Model 3 launch comes in January 2018, and then again in April 2018, because that is when the big ramp-up in the Model 3 comes. "In total, we expect to deliver about 100,000 Model S and X vehicles in 2017, which would be a 31 percent increase over 2016". "We expect Model 3 to have a breakout year in 2019".
But it's the production and deliveries of the Model 3 that hold the greatest interest for investors, and were sending shares of Tesla down more than one per cent after the market's close. "It's that Model S and X sales were only up 4.5% year-over-year despite massive discounting and before all the luxury EV competition arrives next year from Jaguar and Audi and in 2019 from Mercedes and Porsche".
Deliveries in the second half of the year will exceed the first half by several thousand vehicles, according to the Palo Alto, Calif. -based company. It is filling orders from its own employees who are far less likely to publicize problems and complain about delays and glitches.
Tesla Inc. has struggled in producing its least expensive model just after its debut, setting back the mission of CEO Elon Musk to reach the mainstream consumer. It also said that while 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". The success or failure of the Model 3 could make or break the company.
In a statement the car maker outlined "production bottleneck" being the cause of slower production of the mass market Model 3. In July, it started production of the Model 3, which begins at $35,000 - half the starting cost of the Model S.
But the company did not give any new production targets to replace the earlier prediction that it would be making 5,000 Model 3s a week by the end of the year.