A report by Oppenheimer & Co. says that the issues related to the production of the affordable electric car – Model 3 – of Tesla have rooted from a small number of suppliers that haven’t succeeded to deliver on time. On Monday in a research note emailed to Fortune, the analysts of Oppenheimer & Co. wrote that at least one of the suppliers has been fired.
Musk’s predictions going wrong
After a dinner that the investment bank hosted for Tesla, it shared its insights on the electric carmaker. The automaker reported earlier this month that in the third quarter, it produced around 260 of its new Model 3 electric cars. Of the 260, the U.S.-based automaker delivered only 220, missing its prediction that it would produce more than 1,600 cars by September. That prediction was done by the company’s CEO Elon Musk.
Musk, after declaring that the first 30 customers would receive the Model 3 electric cars on July 28, wrote that the “production grows exponentially, so Aug should be 100 cars and Sept above 1,500.” The automaker should have made over 1,630 EVs to complete that prediction.
At an important event on July 28, the CEO of Tesla handed over the first 20 Model 3s to the employees of the electric car making company. Critics have even warned that the electric carmaker might struggle to keep up with those production predictions and put pressure on Tesla employees to complete those demands. The recent note by Oppenheimer comes after a report of the Wall Street Journal that said that major portions of the Model 3s were still being built by hand and not through automation.
Oppenheimer forecasts 100,056 deliveries in 2017
Recently, the CEO of Tesla delayed the release of its upcoming electric vehicle – the electric semi-truck – until Nov. 16 so the U.S.-based automaker could concentrate on the production problems of its new mass-market and much more affordable EV – the Model 3. All the production equipment for Model 3 is working and installed and all the electric cars were moving through the manufacturing line, said the automaker to the Oppenheimer & Co. in a note.
According to the note, the automaker told the analysts that the base model of Model 3 is profitable but the car maker did not provide much details on what the actual profit would be. The analysts at the Oppenheimer & Co. are continuing to maintain their previous estimates that the automaker will deliver 3,005 Model 3 vehicles this year. The company even predicts that the automaker would make overall 100,056 deliveries this year (this number includes Model X as well as Model S EVs).