Tesla falls far short on Model 3 deliveries, pushes back production targets

Tesla is apparently still deep in the circles of production hell.

Tesla shares fell roughly 2 percent in after-hours trading.

“As we continue to focus on quality and efficiency rather than simply pushing for the highest possible volume in the shortest period of time, we expect to have a slightly more gradual ramp through Q1, likely ending the quarter at a weekly rate of about 2,500 Model 3 vehicles,” Tesla said in a release. “We intend to achieve the 5,000 per week milestone by the end of Q2.”

In 2017, the company had said it planned to reach a production rate of 5,000 cars per week for the Model 3, but later revised back that target to the end of the first quarter. Now, Tesla expects to reach the target by the end of the second quarter.

Tesla said it made “major progress” toward addressing the “production bottlenecks” the company has blamed for falling so far short of its Model 3 targets.

The company said that in the last few days of the quarter it reached a production rate that “extrapolates to over 1,000 Model 3’s per week.” CEO Elon Musk had previously said he expected weekly Model 3 production to be “in the thousands” by the end of 2017.

Tesla said it delivered 29,870 vehicles in the fourth quarter of 2017, including 1,550 of its anticipated Model 3 sedan.

The California-based electric-car maker also delivered 15,200 Model S sedans, and 13,120 Model X SUVs. That represents a 27 percent increase over the same quarter in 2016 for both models combined, and a 9 percent increase over Q3 2017, Tesla’s previous best quarter, the company said.

There were no Model 3 deliveries in 2016, as the car was not in production yet.

In addition to those deliveries, Tesla said there were 2,520 Model S and X vehicles and 860 Model 3 vehicles in transit to customers at the end of the quarter, which Tesla will count as deliveries in Q1 2018.

Tesla said it produced 24,565 vehicles total during the quarter, of which 2,425 were Model 3 cars.

Wall Street estimates for the fourth quarter varied widely. In a note sent Tuesday, Cowen analyst Jeffrey Osborne estimated a Wall Street consensus 4,000-5,000 Model 3 deliveries in the fourth quarter. But Osborne’s own forecast was below that at just 2,250. Oppenheimer analyst Colin Rusch had expected Tesla to deliver just 800 Model 3 cars.

Musk had said in October that Tesla has been “deep in production hell” making the Model 3, its first attempt to cross over from being a niche maker of high-end electric cars to a mass manufacturer or more mid-priced vehicles.

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