Recently, the U.S.-based electric car making giant – Tesla Motors – announced that it fell short of its plan to build 1.5K of its first affordable EV – the Model 3 – in the third quarter. The actual number of the EV that it build in the said time duration was around 83% less than the number it promised to build – 260.
Shares of Tesla drop 1.5% in after-hours trading
Late Monday, the U.S.-based electric car making giant made this announcement, which came as another sign of the challenges that the automaker may be facing as it attempts to build a more affordable EV. This car would be a basic version car that is priced at around $35,000.
Shares of the automaker declined 1.5% in after-hours trading after it released the news. Most of the lines at its auto assembly plant in California and its battery plant in Nevada and its Gigafactory were meeting their production targets, said the automaker. The company added that “a handful have taken longer to activate than expected.” In its statement, the automaker said “There are no fundamental issues with the Model 3 or the supply chain. We understand what needs to be fixed and we are confident of addressing the manufacturing bottleneck issues in the near-term.”
However, the EV making giant did not give any new production targets to replace the earlier prediction of building 5k Model 3s a week by the end of the year. Also, the automaker did not respond to a question about a new production target.
Missing deadlines is part of Tesla’s track record: Analyst
Michelle Krebs, an analyst with Autotrader, said that this news should not come as a surprise. She said, “This is the first volume vehicle they’ve ever produced. Making cars is not an easy business, and they’re finding that out.”
This is not the first time that the automaker has fallen short of its targets. The Model X, the high priced crossover of Tesla, went into production in late 2015, which was much later that it was originally promised. Also, the electric car had a slower-than-anticipated roll out. Missing deadlines is part of the track record of Tesla, said Krebs. In addition to this, the production of the Model S sedan was much slower than originally promised as well.
The automaker, however, had defended itself in the past saying that those problems are now well behind it. The EV making giant said that in the third quarter, it had record production of both those luxury models, which was slightly over 25k of the two models. The car making company is expecting to deliver about 100k of those models this year