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Why Tesla Model 3 Deliveries Missed the Mark

Why Tesla Model 3 Deliveries Missed the Mark

Instead, the firm is now saying it'll be making 2500 Model 3s a week by the end of this quarter, hitting the 5000 mark by the end of Q2.

Model 3 production is accelerating Tesla had initially predicted to reach the milestone of 5,000 vehicles per week in December, but in November deferred the target to the end of the first quarter.

On the back of these revelations, shares in Tesla fell by 1.7 per cent to $312 in after-market trading.

Tesla's new mid-range Model 3 electric vehicle is right around the corner, with the auto giant using the new Model 3 to make the quickest trip across the United States in an electric vehicle.

Some of these numbers seem a little ridiculous, but considering this is one of the most hotly-anticipated vehicles in recent memory and deliveries only just started a couple weeks ago, it stands to reason that we would see a few owners testing the market to see what they can get. Specifically, Tesla is now aiming to manufacture 5,000 Model 3 units per week by the end of June. He projects the company will burn through US$4.2 billion this year and assumes the company will raise US$2.5 billion through an equity offering, likely during the third quarter.

Analysts have again expressed concern over whether Tesla can secure the gross margins on the cars it is aiming for, whether customers will still want the auto, and how slower production rates affect the company's other capital-intensive ambitions.

Tesla is burning billions in cash as it struggles to achieve its vision of mass-market electric cars powered by Tesla-brand solar roofs through Tesla-brand home storage batteries. For the year gone by, Tesla delivered 102,432 vehicles, a solid increase from the 83,922 vehicles it delivered in 2016. The highly automated assembly line for the Model 3 means any technical problems slow assembly dramatically. It also surpassed its 100,000-vehicle goal for 2017.

The more gradual ramp is so the company can "focus on quality and efficiency rather than simply pushing for the highest possible volume in the shortest period of time", according to the release.

Tesla's bonds due in 2025 were quoted at 94.9 cents at 8:30 a.m., according to Trace bond price data, the lowest in about a month.

Tesla shares gained 45% in 2017.

Slow production could affect the number of Model 3 buyers who receive the $7,500 federal electric vehicle tax credit, and it is unclear whether this may drive away buyers, said Cowen analyst Jeffrey Osborne. During the last week of December, the company said, it made 793 Model 3s.

That pace of production is still below that of many carmakers.

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