With Tesla poised to post its earnings report for the holiday quarter later today, we won't have to wait long to see how overall Model 3 production stacked up in 2017. The new Model 3, crucial to the company's success, won't hit full-scale production until the end of June, Tesla said Wednesday - almost a year after the company began manufacturing the auto in small numbers. Instead it made just 2,425 during the whole quarter.
Shares of Tesla Inc (TSLA) hit lows unseen in a month during Thursday's trade, one day after the company once again pushed back its production objective for the keenly-anticipated Model 3 sedan. Of that total, the consensus was expecting 4,100 Model 3 cars, but the automaker delivered only 1,550 of its mass-market auto.
Wall Street appears to be exhausted of Elon Musk overpromising and underdelivering onTesla's new affordable Model 3 electric auto.
Throughout a year ago, Tesla Chief Executive Elon Musk had trumpeted a production level of 5,000 a week by December 2017. And if the increase from about 1,000 per week now to 2,500 per week by the end of March were linear Q1 production would reach 22,750.
In delivering 1,550 of its new Model 3 electric vehicles in the fourth quarter, Tesla fell short of Wall Street expectations.More news: Hoda Kotb named 'Today' co-anchor following Lauer's exit
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As would be expecting, the Tesla Q4 2017 deliveries report focuses on an optimistic worldview, noting that the quarter brought more record-high production numbers for the Model S and Model X. On a combined basis, deliveries of the two vehicles were up 27% year over year and 9% quarter over quarter.
The Model 3, which the company plans to make in the hundreds of thousands and sell for $35,000 to $60,000, has raised the stakes.
Although anyone is free to explore the tool, it's designed for prospective Tesla customers - perhaps those concerned about running out of battery life while stranded on a lonely, windswept New Mexican highway during monsoon season. Quality control obviously matters - nobody wants his or her vehicle of the future to be a buggy mess, a "lemon" in old-world parlance - but quality control and mass production have been happy bedfellows for literally decades, since Toyota revolutionized auto manufacturing in the 1970s and '80s. Prior to the release, the average estimate for Model 3 deliveries was 2,900, according to Bloomberg's survey of nine widely-varied industry forecasts. The last update on Model 3 production calls for "a production rate of 5,000 Model 3 vehicles per week by late Q1 2018", which we believe is ambitious.
If that 5,000 Model 3 cars per week target for June 30th is maintained and then reached (obviously not a certainty) Q2 deliveries could more than double sequentially to 40,000-plus cars and reach 250,000-plus cars for the 2018 year.
The company said it will "continue to focus on quality and efficiency rather than simply pushing the highest possible production in the shortest period of time".