By on January 4, 2018

Tesla Model 3, Image: Tesla

To hear Tesla explain it, the fourth quarter of 2017 was a boffo month for the company, with record deliveries and a new product that’s really hitting its stride.

It’s true that 1,550 customers took delivery of a Model 3 in the past three months, after the previous quarter saw just 220 of the lower-priced electric sedans roll into driveways. Overall deliveries rose 9 percent from Q3, for a tally of 29,870 vehicles. It sounds good, but the company, like before, still isn’t making enough Model 3s.

As it continues working through supply and assembly line issues, Tesla has pushed back its goal for 5,000-vehicle-a-week Model 3 production for the second time.

Last year, Tesla assured us it could reach the goal by the end of the calendar year. As problems mounted on the production line, that target moved to the end of the first quarter of 2018.

In yesterday’s quarterly production report, the automaker stated this:

“As we continue to focus on quality and efficiency rather than simply pushing for the highest possible volume in the shortest period of time, we expect to have a slightly more gradual ramp through Q1, likely ending the quarter at a weekly rate of about 2,500 Model 3 vehicles. We intend to achieve the 5,000 per week milestone by the end of Q2.”

Looking at it another way, Tesla’s fourth quarter performance wasn’t all that hot. In terms of production, 24,565 vehicles rolled out of the Fremont, California assembly plant in the last quarter, some 2,425 of which were Model 3s. In the preceding quarter, production volume reached 25,336 vehicles.

Tesla explains that it “slightly reduced Model S and X production in Q4 because of the reallocation of some of the manufacturing workforce towards Model 3 production, which also caused inventory to decline.”

Where does the pushback of Tesla’s 5,000-a-week target leave the company’s 10,000-a-week goal? It’s anyone’s guess. That goal is absent from the most recent report. In its Q3 report, in which Tesla remained committed to hitting 5,000 Model 3s by the end of 2017, the automaker claimed the 10,000-a-week target would be met at some point in 2018.

As it stands now, Tesla claims the last few days of the last week of December saw Fremont “hit a production rate on each of our manufacturing lines that extrapolates to over 1,000 Model 3’s per week.”

Non-employee Model 3 reservation holders already faced a long wait, and the new production targets could give some of them pause. Tesla fanatics, as we all know, will wait until the end of time to take delivery, and there’s nothing Tesla can do to shake their confidence in the company. Still, analysts aren’t nearly as forgiving.

In the fourth quarter, Tesla delivered less than half the Model 3s that analysts expected (4,100 was the prediction there). Speaking to Reuters, Evercore analyst George Galliers said, “The further delay to (production volume) will leave analysts and investors focused on the implications for cash as we head through the first half of the year.”

Tesla share prices fell 2.3 percent before the close yesterday, falling further in after-hours trading.

[Image: Tesla]

Get the latest TTAC e-Newsletter!

Recommended

35 Comments on “Tesla Moves the Goalposts Again as Fourth Quarter Model 3 Deliveries Fall Short...”


  • avatar
    stingray65

    This new economy stuff is awesome. Continue 10+ years of non-stop losses with $1.4 Billion of red ink in Q4, miss model 3 sales target by 70% and announce further delays in ramping up production, flat sales on rest of line-up that put the company down near niche brands Jaguar and Mini for overall US sales, and yet investors still think the company is worth more than Ford that made a $9 billion profit in 2017. I only wish my entire pension portfolio could be in Tesla stock.

    • 0 avatar
      cognoscenti

      “I only wish my entire pension portfolio could be in Tesla stock.”

      Yes, right up until the inevitable crash.

    • 0 avatar
      EBFlex

      2018 will be 15 years of no profit for this house of cards company. I guess that’s what happens when you have a con man as a CEO.

      But keep gloating about 516 deliveries over the past three months Musky. You’re really making a dent in the auto industry.

      Any bets on when Musky will need another cash infusion in the form of deposits?

      • 0 avatar
        indi500fan

        I’m sure there are at least a half million true believers craving the Tesla pickup. So that’s the next likely bait.

      • 0 avatar
        dukeisduke

        I don’t believe he’s a con man; he’s just in way over his head with the whole auto manufacturing thing. He believes (and tells everyone) that he’s smarter than everyone else that’s been building cars for over 100 years, but the results of the last few years have shown just how clueless he is about auto manufacturing.

    • 0 avatar
      Tstag

      Yes except Jaguar have an electric car coming out in in MARCH to take on the TEsla model X. Something tells me the cars won’t be delayed at launch, the doors will shut and it will have user friendly buttons…… Maybe Jaguar won’t be so niche in California!

    • 0 avatar
      addm

      Well if u r so sure about Tesla downfall, just short it

    • 0 avatar
      Master Baiter

      I used to think the same thing about Amazon and Jeff Bezos, now the richest man in the world.

      While it’s not my cup of tea, the initial reviews I’ve seen of the Model 3 are positive; in the long run, delaying ramp by a quarter or two is not a big deal, IF the Model 3 turns out to be a good car.
      .
      .

      • 0 avatar
        Jeremiah Mckenna

        Maybe they should join forces. But then again, Bezos wouldn’t allow him to sell his cars because he doesn’t have the ability to fill the bins and deliver on time.

    • 0 avatar
      healthy skeptic

      @stingray65

      You can short. No one’s stopping you.

      You could make your entire pension portfolio short on Tesla.

    • 0 avatar
      stuki

      In order to sustain a totalitarian regime, you have to find a way to transfer resources. From those competent enough to be perfectly capable of getting by without you, to those dependent on you for their social position, status and even livelihood. Debasing the former, and handing the loot to the latter has served that role very, very well. Ever since it was made official policy with the introduction of central banking, income taxes and the rest of the progressive drivel about a century to a century and a half ago. Then kicked into warp drive around 1970, with Nixon abandoning the last remnants of monetary restraint, and that generation of firebrands’ fascination with fighting wars on anything other than Che Guevara. Then doubled down on yet again; by Greenspan, Paulson, Bernanke and the rest of the idioticracy in the past few decades,

      Over time, you just have to keep doing more and more of it. Since resources increasingly under the command of incompetents, don’t exactly multiply on their own. Then, as you ramp up the printing, taxing, regulation, favoritism and debasing, it becomes ever more lucrative to be positioned to take advantage of those rackets; writing “prospectuses”, hyping hype, scheming and suing over who supposedly “own the rights” to the latest hype, are the “visionaries” behind the latest hype, “get” the hype etc…. While it becomes ever less lucrative to be just a boring, competent chump; doing such “unsexy” things as building cars and selling them for more than they cost to build. After all, those guys are just there to be taxed and debased, to help feed the hype mongers and financialization/regime apologists, anyway.

  • avatar
    indi500fan

    Hey we’ve got a semi-tractor and a pickup truck is almost here.
    And maybe motorcycles, airplanes, and bass boats!
    You can charge them all for free in your solar roofed garage.

  • avatar
    sirwired

    The real question is: “Will buyers punish Tesla for completely blowing their production targets?” If the the answer is “no”, then as long as Tesla can scrape up enough cash to keep going until they DO get production running properly (and profitably), they’ll probably do okay.

    Really, I don’t think buyers will get THAT upset about the delays:
    – The deposit they’ve put down is minimal, especially given the demographic of the buyers.
    – The risk that a reservation holder will go out and buy a Chevy Bolt because there Tesla didn’t get made on-time is pretty low.

    As long as Tesla can sell every Model 3 they are capable of making, they’ll probably do fine. Certainly if they need some additional cash, raising it would be unlikely to be difficult.

    But yeah, Tesla should stop making promises they can’t keep; I doubt anybody except True Believers takes their estimates at face value at this point. (Really, did anybody except The Faithful believe their estimates to begin with?)

    • 0 avatar
      SCE to AUX

      “The risk that a reservation holder will go out and buy a Chevy Bolt because there Tesla didn’t get made on-time is pretty low.”

      Not so. I’m in that camp, and the new Leaf is also a candidate, as well as other non-BEV vehicles. I may also simply cancel and do nothing.

      However, timing is only part of the problem; actually, for me, it’s the least of the problems. Bigger issues for me are the Spartan user interface and the Model 3’s price.

    • 0 avatar
      dal20402

      I need a new EV in April 2019, when the lease on our C-Max Energi is up. This car is our primary family transportation, my wife doesn’t want to drive my LS460 for several reasons, buying the C-Max off lease would be financial suicide, and so I can’t wait past April 2019.

      I didn’t put down a deposit for the Model 3 when it first appeared because I didn’t know enough about the car.

      Now that I know more about the car, it’s actually somewhat attractive to me. But I still won’t put down a deposit, because everything would have to go exactly right for me to get a car by April 2019, and I don’t have confidence that it will.

      We’ll probably get a Bolt instead, so that’s one sale likely lost to the delays.

  • avatar
    vagvoba

    I really want them to succeed. I want the US to be the lead EV innovator and manufacturer.
    However, Tesla is definitely not the manufacturing powerhouse they think they are. Maybe this would be time for some humility and to ask for help in Detroit.

    • 0 avatar
      SCE to AUX

      Many of Tesla’s engineers have worked in automotive before. They’re not all gamers there, you know.

      I suspect their mfg issues stem from taking shortcuts in design, analysis, and mfg readiness, which were forced from above. The engineers know what to do, but probably weren’t allowed to take the time to do it right.

      Mr Musk sets the tone, so the problem sits at his feet.

      • 0 avatar
        derekson

        They’re attempting to run manufacturing processes as if they were programming software. They have literally embodied the SV software mindset of “release as fast as possible, patch later” in their production process which is really quite something. I guess it’s innovation of a sort?

      • 0 avatar
        redapple

        I ve visited both plants in CALI in Lathrop and Fremont. The mid and upper level staff (General Motors equivalent level 7-8) are top shelf veterans from other car companies. There are a couple clunkers in there tho. Like any car company.

  • avatar
    SCE to AUX

    Tesla fell short of a impossible goal that nobody believed. They’re really about 6 months behind, and the future rate of the ramp-up remains unknown.

  • avatar
    thelaine

    Monorail Musk.

  • avatar
    I_like_stuff

    bbbbut Tesla is the perfect winter car, says Fortune. Well except for that whole pesky cold weather thing in winter. LOL.

    http://fortune.com/2018/01/04/the-tesla-model-x-is-almost-the-perfect-winter-car/

    “What’s keeping the Model X from being the perfect winter car is unfortunately the physical limitations of battery technology. The P100D has an advertised battery range, in ideal conditions, of 289 miles. I picked up the car with about 90% juice and it was estimating I had 240 or so miles left on the charge. Just over a hundred miles later I was scrambling to find the nearest Supercharger as I’d drained down to 7% battery.”

    • 0 avatar
      stingray65

      Hey who wouldn’t mind stopping every 100 miles for 30+ minutes during some -20F “global warming” to watch electrons slowly march their way into your empty Tesla battery? Some frostbite is a small price to pay to save the planet.

      • 0 avatar
        mcs

        Except it’s not much of a problem when you’re only going 50 miles and you’re there for 8+ hours. I’ve been just fine on long trips in the cold weather. Even at -4 degrees the other day. I put on 96 miles that day. No frostbite. In fact, I preheated the car to 90 degrees before I left to head home. No problem.

        Again, it’s nothing about saving the planet for many of us with EVs. We happen to torque, smoothness, and quiet. That instant response is addictive.

        At -20f lets see how well your POS ICE does. I passed at least 10 dead on the side of the road on the way from Rhode Island to North of Boston last week and I think it was only +5 degrees out. I got to where I was going without a problem on an 80+ mile trip.

        Right now, EVs aren’t for everyone. I’m not going to argue that since I realize that many of you have 200+ mile daily commutes. For many of us, it works just fine. Most days I’m doing 10 mile round trips and it barely registers on the range gauge. Unplug when I leave and plug back in when I get back home. If it’s long distance and I’m in a hurry, I just fly.

        • 0 avatar
          stingray65

          Check on the videos of Bjorn Nyland on Youtube. He drives all the major EVs from Oslo to Trondheim Norway and back (300 miles each way), often in winter conditions. Amazing, he usually has to stop 4-5 times for 30+ minutes each to recharge. Sometimes the battery is too cold to charge properly (temps in the teens-20s F), and sometimes it is too warm to charge properly (temps in the 70-80s F). All the delays work well for him, because he uses to time to give details about the test vehicle, but most real people just want to get to their destination and not sit at some charging station in the cold. Interesting that he stops more than he needs to, in large part because he doesn’t want to harm the battery with deep discharges (and probably a bit of nervousness about making the next station), which I haven’t heard much about, but he is an engineer so he may know the true story.

  • avatar
    I_like_stuff

    Tesla.pets.com….we lose billions every year, but trust us, we’ll be profitable sometime in 2066.

  • avatar
    Big Al from Oz

    Now, who or what will relieve Tesla of its current woes?

    Musk recently went around getting deposits for future, yet to be designed vehicles to help sure up his cash flow woes.

    Musk is already in talks with the Chinese.

    When Tesla fails will the Chinese honour Musk’s customers with cars and prime movers, let alone his mega car.

  • avatar
    raffi14

    They’re definitely picking up the pace now, deliveries are starting to go out to folks along the east coast.

  • avatar
    SCE to AUX

    EV sales (BEV + PHEV) are up 20% vs 2016, with Tesla leading the pack.

    Tesla is up substantially over 2016. Not many other mfrs can say that, but it’s always open season on this company here at TTAC.

    https://www.thetruthaboutcars.com/2018/01/year-end-american-car-sales-2017/

    https://insideevs.com/ev-sales-rise-december-tesla-leading/

Read all comments

Back to TopLeave a Reply

You must be logged in to post a comment.

Recent Comments

  • mfrank: It wasn’t just quality. Datsuns always seemed more modern than other brands and look more appealing...
  • -Nate: My late father in law brought home a 1981 (?) version of this from the original owner, it was a N/A Diesel as...
  • johnds: Coming from a General Motors family, I remember the term “CamCord” came from a group of...
  • stuki: I don’t know if prospective CUV buyers base much of their decision on the test drive, but the difference...
  • Inside Looking Out: “building cars you would enjoy driving” You cannot be serious. G6 (new back then) was...

New Car Research

Get a Free Dealer Quote

Who We Are

  • Matthew Guy
  • Timothy Cain
  • Adam Tonge
  • Bozi Tatarevic
  • Chris Tonn
  • Corey Lewis
  • Mark Baruth
  • Ronnie Schreiber