Tesla Model 3 production issue tied to suppliers, 3,005 cars will be delivered in 2017

Discussion in 'Model 3' started by gene, Oct 16, 2017.

  1. gene

    gene Moderator

    May 19, 2016
    #1 gene, Oct 16, 2017
    Last edited by a moderator: Feb 14, 2018


    Tesla Model 3 manufacturing bottlenecks are linked to suppliers that have failed to meet their delivery time frames, says Oppenheimer & Co. The additional insight was provided in a research note sent to investors following a dinner held in New York for Tesla management.

    Tesla reaffirmed with Oppenheimer that all Model 3 production equipment is installed and vehicles are making their way through the production line. The electric carmaker and its CEO Elon Musk have continued to dispel a recent report that claimed large portions of the Model 3 were being built by hand. Musk recently shared a video of the Model 3 body line in action, followed by another video showing Model 3 body panels being stamped at the Fremont factory.

    Though Tesla produced only 260 Model 3 vehicles at the end of September, far from the 1,500 units that Musk had originally anticipated, the company is expected to achieve an exponential production ramp period in the coming months and produce up to 5,000 Model 3 vehicles per week in December. Oppenheimer expects that Tesla will deliver 3,005 Model 3 and 100,056 total vehicles in 2017.

    According to the analyst note that was received by Fortune, Tesla expects to achieve 25% margins on the first production Long Range Model 3 vehicles that are priced closer to $49,000 with options. Tesla did not indicate what type of margins it expects for the Model 3 base version that begins at $35,000.

    Article: Tesla Model 3 production issue tied to suppliers, 3,005 cars will be delivered in 2017
  2. Stevez1

    Stevez1 New Member

    Feb 2, 2017
    Well, that is disappointing to read but we will give them time. I want my, I want my Model 3...:)
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  3. Robert German

    Robert German New Member

    Feb 14, 2017
  4. J.Taylor

    J.Taylor Active Member

    Feb 13, 2017
    It isn't much of a surprise to see that some suppliers are falling behind. This is what happens. However, if these supply companies cannot meet production demands, then we should soon see Elon swapping the contracts to others who can and will produce.
    On another note, "Tesla expects to achieve 25% margins on the first production Long Range Model 3 vehicles that are priced closer to $49,000 with option" --- I was sort of hoping that Tesla would take a smaller profit margin at first (then widen it as production costs fell) because I will be one off those wanting the longer range Tesla 3.
  5. GrandPoobah

    GrandPoobah Member

    Mar 1, 2017
    If these suppliers can't meet a measly 1500/month, how can one expect them to meet 5000-10000/week? Elon is right for firing them and looking elsewhere. Better to know now than further down the road.

    It's common in the auto industry that options are at a much higher margin than the base car. Offering the LRB and PUP as the first package delivered accomplishes both initial ease of manufacturing and more dollars up front. Simply put, Elon is a marketing genius. Faced with 450,000+ pre-orders, the more options he can persuade those people to get, the more money Tesla makes. For many of us sitting on the fence as to which battery option to buy, getting the car 3-6 months sooner pushes us over that proverbial fence.

    And all of this with an advertising budget approaching $0 (Elon's Twitter account is free) :)
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