Tesla, Inc. Deliveries Rise, but Model 3 Production Lags

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In Tesla's Q2 2017 report (PDF), the company outlined its production plans for the Model 3 in the third quarter of 2017.

Tesla reported that they expect to deliver around 100,000 Model S and Model X vehicles in the full year of 2017. According to Tesla, the Model 3 production was less than it predicted due to "production bottlenecks".

On Monday, Tesla also mentioned that quite a few systems in its vehicle plants took longer to activate than it was expected. In July, it started production of the Model 3, which begins at $35,000 - half the starting cost of the Model S. While Tesla attributes this to production bottlenecks caused by delays in activating some manufacturing subsystems, it said that there were no fundamental issues with Model 3 production or supply chain.

Analysts caution that it is still early days in the production schedule for the new Model 3 and that Tesla will be working hard to ensure that everything is working correctly before volume is ramped up.

Third quarter Model S and X delivery rates were the best of any quarter yet and year-end delivery projections for those models are set to exceed expectations by several thousand. To increase the daily delivery rate from 276 a day in the first three months of the year to 288 in the last three months, Tesla has suffered negative cash flow of about $13 million a day.

Tesla announced its third quarter output today, and it's somewhat of a mixed bag.

All told, Tesla delivered 26,150 vehicles during the July to September quarter.

Tesla's third quarter Model 3 delivery miss is further evidence the electric auto maker will have difficulties ramping up manufacturing for the vehicle, according to a top Wall Street firm.

Tesla stock prices responded accordingly, but the automaker said not to worry.

Given the number of preorders, Musk must hope that customers waiting on delivery of a Model 3 don't take these appearances to heart. But, just months ago, Tesla said it expected the Model 3 would have a smooth roll out. In a statement to CNBC Monday evening, Tesla blamed production bottlenecks for missing the goal by so much. The success or failure of the Model 3 could make or break the company. The numbers reduced Tesla's second quarter loss by almost $165 million. But what you're seeing is the aero top portion photoshopped onto what's believed to be the actual Tesla semi (link to original image here).

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