Tesla blames 'bottleneck' as only 260 Model 3s produced in Q3

Tesla Model 3

Tesla Model 3Image Tesla EPA REX Shutterstock

Analysts had talked about the possibility of Tesla struggling as it ramped up its assembly line for its newest vehicle. Assuming a run rate of 5,000 per week, conservatively Tesla would deliver around 250,000 Model 3 vehicles in 2018 (obviously, either the rate has to improve or additional S and X production needs to be added to hit half a million, which is full capacity for Tesla's Fremont, CA factory).

The competition is definitely rising as automakers go all in on electric.

In a note to investors Monday, Tesla blamed "production bottlenecks" but offered no details. But the Model 3 was designed from the ground up to appeal to everyone. Meanwhile, Tesla saw a jump in its Model X of 112 percent, to 33,415 units delivered, while the Lexus LX SUV has seen its sales grow by roughly 10 percent in 2017, to 4,051 units. "We expect Model 3 to have a breakout year in 2019".

"It is important to emphasize that there are no fundamental issues with the Model 3 production or supply chain".

"Model 3 production was less than anticipated due to production bottlenecks", the company said in a statement.

Tesla Motors Inc. plans to increase the number of its charging facilities in South Korea in efforts to expand its local presence, spurred by the government's decision to provide subsidies to its Model S 90D sedan marketed here, industry sources said Sunday.

On Monday, the stock fell about $6 a share on brisk volume but has recovered some of that loss in morning trading Tuesday. With the results way bellow his forecast, there's no doubt that this is one of the many thinks Musk will have to address in the next investor meeting. The quarter was a record for Model S and Model X deliveries, representing a 4.5% increase over Q3 2016, its previous best quarter, and a 17.7% increase over Q2 2017. The Model 3 will be on a much larger scale.

Tesla had previously said it wanted to produce 1,500 Model 3s in September alone and 20,000 a month by the end of the year.

Anand points out that one month does not make a trend. "Although the vast majority of manufacturing subsystems at both our California car plant and our Nevada Gigafactory are able to operate at a high rate, a handful have taken longer to activate than expected".

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