Tesla Model 3 deliveries lower than expected because of 'production bottlenecks'

Tesla Model 3 deliveries lower than expected because of 'production bottlenecks'

Tesla Model 3 deliveries lower than expected because of 'production bottlenecks'

Late on Monday, Tesla Inc. reported production and deliveries for the third quarter.

Goldman analyst David Tamberrino reaffirmed his sell rating for Tesla shares, predicting Model 3 production will be slower than expected. Missing guidance by about 85 percent sends most companies' shares into a tailspin, but Tesla stock rose as much as 2 percent Tuesday.

Meanwhile in a statement, Tesla said there were no fundamental issues with its Model 3 production but some manufacturing subsystems had taken longer to activate than expected. The company understands what needs to be done and that they are confident of addressing the bottleneck of production issues in nearest term. The auto, which is half the price of Tesla's previous models, is critical for the company's goal of moving from a niche manufacturer of luxury cars to a mainstream automaker.

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Tesla built 260 Model 3s between July and September, the company said Monday in a statement. "Automotive gross margin estimates for the quarter given worse utilization on Model 3 and likely lower margin Model S/X sales", he wrote. (NYSE: GM). The Model 3 is Tesla's mass market play and the vehicle absolutely must succeed in the marketplace. This makes the least expensive Model S the 75D, which is a dual-motor all-wheel drive vehicle that costs $5,000 more ($74,500) than the discontinued Model S. - Tesla Motors/handout via ReutersPALO ALTO, Oct 3 - Tesla has missed its production target for the Model 3 sedan, the first mid-priced electric vehicle for the mass market in its line-up, the auto maker announced yesterday. The market would rather see the Model 3 produced well than have it rushed out quickly to meet delivery targets, said Morgan Stanley analyst Adam Jonas. The total number of units they have built thus far is 260 or less than 83% of their target for the Model 3.

Tesla and Musk struggled heavily to ramp up the production of the Model X, the company's crossover SUV with swooping doors.

The company said it has received some 450,000 pre-orders for the Model 3. During Tesla's second quarter shareholder call, Musk called out the arbitrary timeline of a financial quarter, saying "when you have an exponentially growing production ramp, slight changes of a few weeks here or there can appear to have dramatic changes".

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