Why Tesla Model 3 Deliveries Missed the Mark

A Mixed Street Reaction To Tesla's Q4 Deliveries

Tesla misses production goals for all-electric Model 3 sedan

On the production side, Tesla is facing bottlenecks that have forced CEO Elon Musk to dial back his own mass manufacturing goals.

The successful launch of the Model 3 is crucial to stemming Tesla's cash burn, which hit a record $1.4 billion in the third quarter, said J.P. Morgan analyst Ryan Brinkman in a note sent Thursday. The company will likely end the first quarter at a weekly rate of about 2,500 Model 3 vehicles.

"As a result of the significant growth in our production rate, we made as many Model 3's since December 9 as we did in the more than four months of Model 3 production up to that point", Tesla said, explaining that this is why it wasn't able to deliver many of these cars during the holiday season, just before the quarter ended.

The company said Model 3 deliveries to non-employee customers, "are now accelerating rapidly". This is the second time Tesla has punted on its 5,000-per-week milestone. And with production targets for that auto being relaxed again, they could be waiting even longer.

Priced at $35,000, the Model 3 has been touted by Mr. Musk as an affordable, high-volume compact sedan that would enable Tesla to sell more than 500,000 cars a year starting in 2018. The company has also said that welding processes and final assembly tasks at its auto factory in Fremont, Calif., were moving more slowly than expected.

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"The Model 3 must be right in terms of quality".

It's a simplified version of what Tesla auto owners get in-vehicle, but it's plenty useful for either giving a broad tea of what taking a road trip in one of Tesla's electric vehicles would look like in practical terms, and it's also a good way to get an understanding of what Tesla's expansion of its Destination Charger and Supercharger network means for potential vehicle ownership.

Over all, Tesla had the most productive year in its history, delivering 101,312 vehicles, a 33 percent increase from 2016. The Model S led with 15,200 finding customers, followed by the Model X at 13,120.

Tesla Inc.'s (TSLA) delivery of its new Model 3 electric vehicle fleet fell short of Wall Street's estimates in the fourth quarter and reported production issues have clouded public opinion of the company's newest sedan.

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