No manufacturer ever wants to experience production problems, especially a high-profile disruptor like Tesla Inc. (ticker: TSLA).
Nonetheless, Tesla reported that it delivered 1,550 Model 3s in Q4 2017. In the last seven working days of Q4, Tesla cranked out 793 Model 3s and the company expects to reach a production rate of 5,000 per week by the end of Q2 2018. Tesla CEO Elon Musk originally promised such production numbers for the end of 2017.
Customers who pre-ordered a Model 3 will have to keep on waiting. In Q3 2017 only 220 Model 3 cars were delivered to customers. The company “emphasizes that there are no fundamental issues with the Model 3 production.” However, according to Bloomberg, Tesla has been spending almost $0.5 million each hour, or $1 billion-plus per quarter to bolster assembly line machinery and tools.
The Tesla Nevada Gigafactory relies heavily on automation, cutting edge technology, and highly trained specialists. But in October 2017, Tesla cracked the whip and cut 400 to 700 employees – one to two percent of its workforce. Officially, the dismissals were based on performance, but according to CNBC and former employees, it was to save costs. Further speculation points to the Model 3 production problems as a cause of the firings.
860 Model 3 vehicles were in transit at the end of the quarter and these will be counted as deliveries in Q1 2018.
