Tesla Falls Behind on Model 3 Production in Q3

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These will be counted as deliveries in Q4 2017, Tesla said.

In 2018, it hopes to increase production of the vehicle to over 10,000 a week and have an annual target of half a million Model 3s being produced.

While the miss is early on in Tesla's Model 3 manufacturing growth process, it could be an indicator of struggles to come.

"It is important to emphasize that there are no fundamental issues with the Model 3 production or supply chain", the company continued. In July, it started production of the Model 3, which begins at $35,000 - half the starting cost of the Model S.

That said, while the Model 3 production has not gone up to snuff, existing manufacture of Tesla's previous models did deliver in numbers.

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Production on the highly touted vehicle was expected to expand from 100 cars in August to 1,500 in September, and plateau to 20,000 per month in December.

That's well short of the target of 1,500 that Tesla had set.

Musk and his employees know they have a hard task ahead of him.

"But you guys know this; you're veterans". Before the end of next year, Tesla expects Model 3 production to achieve a weekly rate of 10,000 units. Panasonic is also equipment and technology provider to Tesla-SolarCity's PV module manufacturing lines, pilots of which are being established at a second "Gigafactory" location in Buffalo, New York. Tesla has offered value for money in Model 3 and one major drawback for Model 3 is the paid access to superchargers. "Automotive gross margin estimates for the quarter given worse utilization on Model 3 and likely lower margin Model S/X sales", he wrote. Having followed Tesla Launches in the past we wish the company luck. The total number of Model Xs delivered throughout Q3 was 11,865, closing the gap on the Model S sedan which is still on top with 14,065.

Overall Tesla expects to deliver 100,000 Model S and Model X cars in 2017. It shows a modern looking truck which is quite similar to the teaser image Tesla had released in April. While competition in the market is expected to heat up in the medium-term, with luxury brands such as Volvo, Mercedes, and Porsche all doubling down on their EV plans, Tesla's premium lineup may still have some scope for growth.

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