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data sources: Bloomberg, Tesla
Two years ago, Elon Musk proclaimed that Tesla Motors would produce 500,000 all-electric vehicles in 2018, with the highly anticipated Model 3 accounting for about 400,000 of that enthusiastic projection according to some estimates. While some had faith in Musk’s ambitious plan (shares of the company jumped more than 5% after the announcement), many analysts expressed serious doubts that the company would be able to reach its lofty target.
It’s no secret that in the two years that have followed Tesla has struggled mightily to get production of its Model 3 car up and running smoothly. Multiple delays and “production hell” as Musk called it have forced the company to repeatedly walk back its projections for how many Model 3s it would put out. But even as recently as August 2017, Musk was promising that Tesla would start to produce 10,000 units of the vehicle weekly by the end of 2018, saying “What people should absolutely have zero concern about, and I mean 0, is that Tesla will achieve a 10,000 unit production week by the end of .”
Now, Tesla has gone from aiming to produce as many as 400,000 Model 3s this year to trying desperately to make 5,000 a week within three months.
So, just how far short of its original target has Tesla fallen?
As of May 4, 2018, Bloomberg projects that just under 21,000 Model 3s have been produced since the start of the year, an average of just over 1,000 per week. Production ramped up somewhat in April, with the automaker putting out more than 2,000 of the vehicles for three straight weeks, reaching a peak of 2,270 in one of those weeks — still well short of the 5,000 per week Musk said just last summer his company would achieve by the end of 2017.
In order to meet its original production target, Tesla would have to put out roughly 379,000 more Model 3s by the end of the year. Basically, the company would need to immediately increase throughput by 391% — from its current high of 2,270 weekly to an average of 11,147 Model 3s per week for the rest of the year.
Clearly, Tesla won’t meet these original projections, but it does believe it has “largely overcome” its biggest production hurdle, the battery module production line at its Nevada factory. However, many challenges still lie ahead, and there are concerns about Tesla’s ability to quickly boost production without running into quality control issues. The automaker’s Model S and Model X have both had quality issues in the past, and early owners of the Model 3 have already been reporting various problems.
The future of Tesla absolutely depends on its ability to get the Model 3’s production issues sorted out, as the company just posted its biggest quarterly loss. Its stock also plummeted more than 5% Thursday after Musk snapped at analysts for asking what he described as “boring, bonehead questions” about the Model 3.
It also has a long list of about 450,000 people waiting for the vehicles they pre-ordered to be delivered, and even the biggest Tesla supporters presumably have limits to their patience.