Tesla Model 3 numbers disappoint again

Company adjusts projection down to 2,500 Model 3s per week in Q1 2018.

In a statement on Wednesday, Tesla said that it had delivered 1,550 Model 3 vehicles in the fourth quarter of 2017. This is a step up from the 260-odd vehicles that had been delivered in Q3 after the delayed model was launched in July, but a significant distance short of what industry-watchers had hoped.

Tesla said in last quarter's financial call that the disappointing Q3 Model 3 production numbers were the result of production bottlenecks caused by a sub-contractor at the Gigafactory, the company's massive battery factory outside of Reno, Nevada. But Tesla CEO Elon Musk said that, by the end of Q1 2018, the company would be churning out Model 3s at a rate of 5,000 cars per week.
In today's statement, however, Tesla adjusted that projection downward.

"As we continue to focus on quality and efficiency rather than simply pushing for the highest possible volume in the shortest period of time, we expect to have a slightly more gradual ramp through Q1, likely ending the quarter at a weekly rate of about 2,500 Model 3 vehicles," Tesla wrote. "We intend to achieve the 5,000 per week milestone by the end of Q2."

Tesla also noted that it had actually produced 2,425 Model 3 vehicles in the final quarter, but it only counts as "delivered" those vehicles that are transferred to the customer with all paperwork correct. Tesla said that its production rates increased considerably in the last few days of the quarter, where it "hit a production rate on each of our manufacturing lines that extrapolates to over 1,000 Model 3s per week."

Even counting "produced" cars, though, Tesla appears to have disappointed analysts. According to Reuters, firms predicted deliveries between 5,800 on the high end to 2,250 on the low end.

Tesla's future is tied closely to the promise of the Model 3, a no-frills sedan that's roughly half the cost of a low-end luxury Model S and Model X. Musk has said that his Model 3 is intended to be an electric vehicle for the budget-conscious, and its development would be subsidized by the glitzier older models.

Those older models appear to still be selling well, according to Tesla. In Q4, the company delivered 15,200 Model S vehicles and 13,120 Model X vehicles. Tesla wrote that those numbers were record for the company, "representing a 27-percent increase over Q4 2016 and a 9-percent increase over Q3 2017."

The Model X, too was initially plagued by production issues after it debuted in 2015, although those problems stemmed from too much complexity, according to the company's CEO. The Model 3 was designed to be a simplified car, easy to push out on an assembly line at a high rate.

Interestingly, according to InsideEVs, in Q4 2017 GM delivered 8,995 Chevy Bolts—the Tesla Model 3's primary competitor on range and price.