Tesla only produced enough Model 3 vehicles for employees and investors during the fourth quarter of this year, according to a report published Monday.
Tesla built 260 Model 3s between July and September, the company said Monday in a statement. The company predicted in August that it would produce more than 1,500 before the end of the fourth quarter.
“It is important to emphasize that there are no fundamental issues with the Model 3 production or supply chain,” Tesla said Monday in a statement, which included the production numbers. “We understand what needs to be fixed and we are confident of addressing the manufacturing bottleneck issues in the near-term.”
Tesla delivered only 220 Model 3s during the fourth quarter, a number well below the 1,300 that analysts surveyed by FactSet expected on average. Tesla sold these vehicles in the quarter to employees and investors.
Total orders for Tesla’s Model 3, which CEO Elon Musk hopes makes Tesla into a car for the every-man, tumbled to 455,000 from a high of 518,000, Musk told reporters.
Production on the highly touted vehicle was expected to expand from 100 cars in August to 1,500 in September, and plateau to 20,000 per month in December. Musk plans to eventually build 20,000 cars per month – Tesla will have to ramp up production dramatically if it hopes to hit the December mark.
The Model 3 sedan, which was unveiled July 30, is priced at $35,000 before incentives or options, but could increase if customers waiting on backorder prefer a model with a larger battery. Tesla produced roughly 85,000 vehicles in 2016 and plans to make half a million in 2018.
Analysts have grown weary over Elon Musk’s consistent failure to deliver on promises.
Ben Kallo, an analyst for R.W. Baird, for instance, told investors in September ahead of Tesla’s report that the company probably delivered only about 300 Model 3s.
“We believe Q3 will be the most challenging part of the Model 3 production ramp,” he wrote.
Investors who support fighting climate change have also grown impatient with Tesla.
The company’s 60 percent share rise and inability to turn a profit during this past year has roiled traditional automakers and created greater risk for all manufacturers, a report from Nordea Global Climate and Environmental Fund notes.
“We don’t see upside,” Thomas Sørensen, who manages the fund, told Bloomberg in a Sept. 28 interview. “What’s needed in cash flow generation to get to the current valuation — we don’t see that happening.”
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