Hitting the Ramp: Tesla Misses First-quarter Model 3 Production Target

Steph Willems
by Steph Willems
hitting the ramp tesla misses first quarter model 3 production target

You’ve probably heard of the Ford Model T before — perhaps in a book or on Tumblr or something. Brainchild of auto pioneer Henry Ford, the Model T (introduced in late 1908) revolutionized the use of the assembly line for mass production five years later. Between 1912 and 1917, annual Model T production soared from 68,711 vehicles to 735,020.

Why am I mentioning a car that’s over a century old? Well, it’s because Tesla, in all of its its exuberance, decided to namedrop the Model T in its first-quarter 2018 production report. Apparently, we might be looking at the next one.

Of the 34,494 Tesla vehicles built in Fremont, California over the first three months of 2018, some 9,766 were Model 3s. In the fourth quarter of 2017, Tesla built 2,425 Model 3s. However, Tesla claims some 2,020 of the compact electric sedans came to be in the last seven days, meaning roughly one-fifth of its Model 3 output came during an eleventh-hour, all-stops-pulled production push at Fremont — which reportedly saw volunteers from other model lines switch over to Model 3 assembly.

2,020 vehicles, if you recall, is nearly 500 vehicles per week less than Tesla’s Q1 2018 Model 3 production target. After Model 3 production began last summer, the automaker pushed back its 5,000 per week target twice — from the end of 2017, to the end of Q1 2018, and then to the end of June, where it still stands.

Separating the past week from the rest of Q1, Fremont cranked out 7,746 Model 3s over the course of roughly 12 weeks. Using simple division, that equals a weekly production rate in the mid-600s. Admittedly, this paints an imprecise picture of the plant’s output, but Tesla isn’t in the habit of publicizing weekly production figures. Thus, it’s difficult to gauge the ramp-up approaching the end of Q1.

Despite missing its already diminished target and achieving its production rate only through the use of non-dedicated Model 3 workers, Tesla is glowing. Boastful, even.

“The Model 3 output increased exponentially, representing a fourfold increase over last quarter,” the automaker said in a Tuesday release. “This is the fastest growth of any automotive company in the modern era. If this rate of growth continues, it will exceed even that of Ford and the Model T.”

We’ll let history bear this prediction out. Tesla claims it overcame “production and supply chain bottlenecks, including several short factory shutdowns” during this hectic period, and fully expects to build 2,000 Model 3s over the next seven days.

“Given the progress made thus far and upcoming actions for further capacity improvement, we expect that the Model 3 production rate will climb rapidly through Q2,” the automaker stated. “Tesla continues to target a production rate of approximately 5,000 units per week in about three months, laying the groundwork for Q3 to have the long-sought ideal combination of high volume, good gross margin and strong positive operating cash flow.”

Hold on a minute — the Q2 target now contains an “approximately” and an “about.” It seems this target, while not receding like in has the past, has just grown fuzzier.

In terms of Model S and X output, Q1 2018 saw production top that of Q4 2017 by 11.7 percent.

The release of production data comes after a week that saw Tesla’s stock price drop precipitously, the recall of 123,000 older Model S cars for a power steering issue, and the admission that a California man died after his Model X crashed while cruising on Autopilot. Since the start of Tuesday trading, Tesla’s stock price is up about 4 percent.

Late Monday brought a report, based on two sources close to the company, that CEO Elon Musk had taken direct control of the company’s production division. The Information claimed Musk took over from Doug Field, the automaker’s senior vice president of engineering, in this role. Musk wasn’t too happy about the story.

Can’t believe you’re even writing about this. My job as CEO is to focus on what’s most critical, which is currently Model 3 production. Doug, who I regard as one of the world’s most talented engineering execs, is focused on vehicle engineering.

— Elon Musk (@elonmusk) April 2, 2018

[Images: Tesla]

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8 of 36 comments
  • SCE to AUX SCE to AUX on Apr 03, 2018

    FWIW, although the Model 3 production numbers missed Tesla's sky-high estimate, it is still the best-selling EV in the US in 2018 - by far. https://insideevs.com/monthly-plug-in-sales-scorecard/ #1: Model 3 - 8180 #2: Model S - 5300 #3: Model X - 4500 #4: Bolt - 4375 #5: Leaf - 2545 Of these, only the Model 3 and Leaf stand to climb a lot this year.

    • See 5 previous
    • Jkross22 Jkross22 on Apr 04, 2018

      Of the 3 companies on this list, how many have turned a profit in 2 consecutive quarters? As is, Tesla is cooked. Those institutional investors are going to want their money back, and will likely be the ones pressing Musk into a partnership or sale.

  • Grrr Grrr on Apr 04, 2018

    Comparison to the Model T is remarkably valid given Musk's penchant for automation in production. Henry Ford presumed that the Model T would not require a successor, and had standardised and automated the production of the Model T to such a point that the per-unit cost was exceptionally low; however, the costs of the tooling and machinery would take forever to amortise, and moreover, his plants where not designed to allow changes in the slightest, hence the massive cost to introduce the new-fangled Model A. The same applies to Tesla, who will also be out-run by more agile competition in due course; especially while they are re-learning lessons learnt by the rest of the industry years ago.

  • Duke Woolworth We have old school Chevrolet Bolts, only feasible to charge at home because they are so slow. Travel? Fly or rent luxury.
  • Styles I had a PHEV, and used to charge at home on a standard 3-pin plug (240v is standard here in NZ). As my vehicle is a company car I could claim the expense. Now we are between houses and living at the in-laws, and I'm driving a BEV, I'm charging either at work (we have a wall-box, and I'm the only one with an EV), or occasionally at Chargenet stations, again, paid by my employer.
  • Dwford 100% charge at home.
  • El scotto Another year the Nissan Rogue is safe.
  • John R 4,140 lbs...oof. A quick google of two cars I'm familiar with:2017 Ford Fusion Sport - AWD, twin-turbo 2.7 V6 (325 horsepower and 380 lb-ft of torque)3,681 lbs2006 Dodge Charger RT - RWD, naturally aspirated 5.7 V8 (340 horsepower and 390 lb. -ft. of torque)4,031 lbs