Tesla Reports New Setback for Model 3, With Output Lagging

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Tesla Reports New Setback for Model 3, With Output Lagging


2018-01-04 01:45:24

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The Tesla Model 3 at its introduction in July. The number of cars Tesla has produced has fallen far short of company projections.

Credit
Alexandria Sage/Reuters

Tesla’s first mass-market offering keeps encountering roadblocks.

The electric-car maker said on Wednesday that production of the new vehicle, the Model 3, in the final quarter of 2017 was far behind what its chief executive, Elon Musk, forecast when it went into production six months ago.

Priced at $35,000, the Model 3 has been touted by Mr. Musk as an affordable, high-volume compact sedan that would enable Tesla to sell more than 500,000 cars a year starting in 2018.

In July, Mr. Musk predicted that Tesla would be able to make 20,000 Model 3s a month by December. But in the past three months, it has built only 2,425.

Over all, Tesla had the most productive year in its history, delivering 101,312 vehicles, a 33 percent increase from 2016. But production of the Model 3 was slowed by manufacturing glitches at Tesla’s giant battery plant in Nevada, known as the Gigafactory. The company has also said that welding processes and final assembly tasks at its car factory in Fremont, Calif., were moving more slowly than expected.

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Of the Model 3s assembled in the fourth quarter, Tesla delivered 1,550 to customers, although many of the initial recipients were employees of the company.

“This is par for the course for Tesla and Elon Musk, whose history of stating goals and forecasts and not meeting them is pretty well established,” said Karl Brauer, a senior director at Kelley Blue Book, an automotive research company. “That the Model 3 is moving slowly isn’t a surprise. Most independent experts found the production rates he was forecasting were pretty unlikely.”

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