Tesla Model 3 Volume Production is Late, But On Its Way

Tesla has some good news, and some not as good news.

The good news is there’s this revolutionary new electric car base priced at $35,000 plus destination fee with 220 miles range, and with style and lessons learned from the Model S.

You may have heard of it. Called the Model 3, it has an unprecedented half a million paid reservations, threatens to turn the automotive world on its head, but news concerning to some is mass production is a tad late.

Tesla CEO Elon Musk previously projected from its July launch through September that 2,000 would be produced. To date, around 240 or so are estimated in new owner’s hands, and it’s questionable how many will be produced this month.

Officially, Tesla gave guidance for July through September, and then said it would be producing 5,000 a week by the end of the fourth quarter.

Putting a finer point on things based on Tesla’s guidance, this could mean around 4,000 units produced in October, 10,000 in November, and 20,000 in December, for 35,000 total. If that were to happen, it would be more than any single EV in the U.S. has sold in a whole year since the dawn of the EV era.

Still Good News

Filed under the better-late-than-never category, great numbers of the Model 3 are still on their way, and Musk and company have tweeted they know their work is cut out for them.

And, despite worries expressed in other quarters, it is a little early to fret overly much, says analyst Alan Baum who has for a while now forecasted a far-more modest 12,000 units to be produced this year.

In the interim, Tesla is showing other encouraging signs including a record 4,500 estimated Model S sales and 3,400 Model S sales in September.

These numbers – about double what a typical month has been this year – were accomplished thanks to some changing around of options, and prices to stimulate confidence as the bread-and-butter car struggles to get up to speed.

Hold Tight

If Tesla is still building the Model 3 at a slow pace after this month, that may be cause for the 12,000 estimate to be downgraded, said Baum, but for now he’s holding out hope that the monkey wrench in the assembly line gears will be cleared.

At a certain point, Tesla expects an “exponential” production increase for a car intended to contribute 80 percent of a Tesla-estimated half a million total annual production in 2018.

The idea all along is production would initially be slow – and as things would have it, “slow” is going on longer than projected.

Tesla at least did manage to bring 30 hand-prepped Model 3s to market on time this summer – a first for the company which previously over promised and under delivered even more on the Model S and X delivery timelines.

Those cars experienced delays in projected first-delivery dates, and the 3 at least beats that trend.

Meanwhile investment bears are doing what bears do best, and optimists are adjusting the narrative on the fly for a company whose high-flying stock price shows what the market yet believes.

And, even conservative analysts who do not believe hype also believe.

Baum’s estimate remains 105,000 Model 3s sold in the U.S. alone in 2018, and 164,500 in 2019.

No, those do not add up to what Tesla has said either, and yes, they could be revised when evidence more that tweets is presented, but at this stage the Model 3 is still the one car with the most hope the EV world has for upending how people travel.

To date, close to 300 Model 3s will soon be in the hands of owners, and the pipeline is due to be unclogged soon. Stay tuned.


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