Economy

Tesla Deliveries Rise In Third Quarter, But Model 3 Faces 'Bottlenecks'

Tesla Deliveries Rise In Third Quarter, But Model 3 Faces 'Bottlenecks'”

Tesla, which began production of the Model 3 in July, has so far delivered just 220 of those sedans and produced 260 during the quarter.

Gene Munster, analyst at Loup Ventures, wasted little time describing what he sees as hurting the Tesla narrative, saying in a report on Monday, "The real problem is that tonight's results chip away at investor Model 3 production confidence".

Wall Street "is concerned about production, as it appears that Model 3 will be severely supply-constrained; however, we believe this is a short-term issue", he wrote.

Output of the sedan that starts at $35,000 - roughly half the cost of the least expensive Model S - was lower than expected because of unspecified "bottlenecks", according to the company. "We understand what needs to be fixed and we are confident of addressing the manufacturing bottleneck issues in the near term". Tesla had planned to produce 20,000 Model 3 in a month by December month and around 500,000 a year by late 2018.

The company did not talk further whether it's December or 2018 churn out forecasts remain on track or not.

Tesla Model 3
Tesla Model 3 was held back by a “manufacturing bottleneck” in Q3

Consequently, the analyst predicts Tesla sales will rise to $58 billion in 2021 from $8 billion a year ago. But judging by numbers, we could say that things didn't work out for Tesla.

The automaker said 4,820 Model S and X vehicles were in transit to customers at the end of the third quarter and would be counted with its fourth-quarter figures. "This is supposed to be a hypergrowth company".

Tesla is one of the best-performing stocks in the market this year. It closed up 43 cents Monday to $341.53 but fell in after-hours trading. State legislation passed in September will force companies that offer state-paid rebates on their electric vehicles to prove their labor practices are fair. If it churns out the Tesla's forecasts, conversely, the central subsidies will run out sometime in the upcoming year. As it stands, more than 500,000 customers have preordered the Model 3, which will costs $35,000 for the basic model, but could also come as cheap as $27,500 when factoring the $7,500 federal electric auto tax credit customers could receive.

© 2017 Los Angeles Times under contract with NewsEdge/Acquire Media. But how about all the other cars that are more than a year old?



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