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Tesla still breaking records but missing targets

05 January 2018
Tesla still breaking records but missing targets

The Drive editor-at-large Alex Roy and the car's owner, Daniel Zorrilla, drove a Tesla Model 3 across country from Los Angeles to New York City in 50 hours, 16 minutes and 32 seconds, setting another Cannonball Run record for an electric vehicle.

The company reported deliveries of 1,550 Model 3s in the final three months of the year, trailing analysts' average estimate for about 2,900 units in a Bloomberg News survey.

"As we continue to focus on quality and efficiency rather than simply pushing for the highest possible volume in the shortest period of time, we expect to have a slightly more gradual ramp through Q1, likely ending the quarter at a weekly rate of about 2,500 Model 3 vehicles". Delays increase the risk that reservation-holders will cancel orders.

As of September 30th, Tesla's cash and cash equivalents were estimated at $3.5 billion.

One-third of the quarter's S3 were made in the last seven days. In total, 101,312 units of the Model S and Model X found homes in 2017, an increase of 33% over the previous year.

Tesla's slower ramp up in manufacturing Model 3s led analysts to raise the prospect that another capital raise could be coming. Analysts had expected total deliveries of about 30,000. Quality control obviously matters - nobody wants his or her vehicle of the future to be a buggy mess, a "lemon" in old-world parlance - but quality control and mass production have been happy bedfellows for literally decades, since Toyota revolutionized auto manufacturing in the 1970s and '80s.

Tesla had initially predicted to reach the milestone of 5,000 vehicles per week in December, but in November deferred the target to the end of the first quarter. A conventional auto factory operating at full speed on two shifts can churn out almost 1,000 vehicles a day.

Priced at $35,000, the all-electric Model 3 has a range of 220 miles. Tesla said in August it had about 500,000 reservations for the vehicle and demand was not a constraint. Among the issues Tesla faced was its battery module assembly line at its Nevada Gigafactory, which required a redesign.

Tesla said Wednesday it's making "major progress" addressing problems "with our production rate increasing significantly towards the end of the quarter". In addition to the 1,550 Model 3 sedans that were delivered during the fourth quarter, more than 800 of them were still in transit at the end of the quarter, although that still leaves the company far short of the consensus for Model 3 deliveries.

Tesla shares, despite paring some gains from a high of $385 in September, still trade at 46 percent above their price a year ago.