Tesla may overcome Model 3 Gigafactory bottleneck soon

Tesla said last month it delivered 26,150 vehicles in the third quarter, a 4.5 percent rise on the same period of 2016, but added that "production bottlenecks" had left the company behind its planned ramp-up for the $35,000 Model 3.

Led by Silicon Valley entrepreneur Elon Musk, Tesla is struggling to overcome production bottlenecks as it builds the Model 3, seen as key to the company's long-term profitability.

Tesla earlier this month blamed manufacturing bottlenecks for limiting quarterly production of its mass-market Model 3 sedan to 260 vehicles rather than its 1,500 goal.

Tesla said its primary production constraint has been at the battery module assembly line at its Gigafactory in Sparks, Nevada. Four modules are packaged into an aluminum case to form a Model 3 battery pack. Tesla says that this has taken longer to get up to volume than has been expected due to the complexity of the part design, and the automated assembly process required to put them together. Tesla said there are no issues with its supply chain. "We have redirected our best engineering talent to fine-tune the automated processes and related robotic programming, and we are confident that throughput will increase substantially in upcoming weeks and ultimately be capable of production rates significantly greater than the original specification".

Tesla Inc (TSLA.O) racked up a $619 million loss in the third quarter, its biggest-ever, driving its shares sharply lower as the electric-car maker spends to speed up production of its more affordable Model 3 sedan. We will provide an update when we announce Q4 production and delivery numbers in the first few days of January.

It was not all bad news. Some of the battery packs have had to be assembled by hand, according to the report.

"While we continue to make significant progress each week in fixing Model 3 bottlenecks, the nature of manufacturing challenges during a ramp such as this makes it hard to predict exactly how long it will take for all bottlenecks to be cleared or when new ones will appear", Tesla said in the letter.

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