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Volume production of Tesla Model 3 pushed back to late Q1 2018; battery module problems; record loss in Q3 2017

2 November 2017

In its third-quarter 2017 financial results update, Tesla Motors reported that it is delaying its expected start of volume production—defined here as 5,000 Model 3 vehicles per week—to “late Q1 2018”. The company was earlier targeting that milestone for “some time in 2017”. (Earlier post.)

As first emerged in early October, Tesla has been having production issues with the Model 3, and only delivered 222 units in the third quarter. In the investor update, Tesla ascribed the bulk of the delay to the battery module assembly line at its Gigafactory, where cells are packaged into modules.

Four modules are packaged into an aluminum case to form a Model 3 battery pack. The combined complexity of module design and its automated manufacturing process has taken this line longer to ramp than expected. The biggest challenge is that the first two zones of a four zone process, key elements of which were done by manufacturing systems suppliers, had to be taken over and significantly redesigned by Tesla.

We have redirected our best engineering talent to fine-tune the automated processes and related robotic programming, and we are confident that throughput will increase substantially in upcoming weeks and ultimately be capable of production rates significantly greater than the original specification.

—Tesla Motors

Tesla also noted that bringing the high level of automation in the Model 3 production process online is challenging in the early stages.

In Q3, Tesla delivered its 250,000th Tesla.

Nevertheless, Tesla said that several manufacturing lines, such as drive unit, seat assembly, paint shop and stamping, have demonstrated a manufacturing ability in excess of 1,000 units per week during burst builds of short duration.

Other lines, such as battery pack assembly, body shop welding and final vehicle assembly, have demonstrated burst builds of about 500 units per week and are ramping up quickly.

Cell production at the Gigafactory also continues to ramp.

Tesla will further update the progress on Model 3 production when it relases Q4 2017 figures in January.

Financial results. The company posted a Q3 2017 loss of $619.4 million—its largest quarterly loss yet—compared with a product of $21.9 million in Q3 2016.

Revenue was up 30% to $2.98 billion. Tesla delivered 26,137 vehicles in the third quarter, up 4.5% year-on-year.

The company said that it received record net orders for Model S and X in Q3, and that global net reservations for the Model 3 continued to grow “significantly”.

November 2, 2017 in Electric (Battery), Sales, Vehicle Manufacturers | Permalink | Comments (6)

Comments

Didn't see that comin' at all. /sarcasm

These ongoing delays will give enough time to 20+ other major manufactures to mass produce extended range e-vehicles with new improved ultra quick (5 minutes) charge batteries?

Competition will be fierce by 2020 or so and (made in Asia) lower cost BEVs may flood the market.

20+ manufacturers will catch up? Haha. If you believe that you bought short. No one is close or has a Supercharger network. The Chinese are busy trying to supply their own market, and Trump won't let them compete in the U.S.

Lighter, lower cost, higher performance batteries are the keys to near future affordable extended range BEVs to better compete against ICEVs (gasoline and diesel). The rest of electric vehicles can be produced at the same price or at lower price than current ICEVs.

Many or most of the near future BEVs could be AWD at little extra cost. Multi e-motors and electronic controls are superior to mechanical units used on ICEVs.

The advent of this new lighter high speed charging battery opens up a HUGE new market.
The suspension does not to carry as heavy a load, which makes it lighter making ranges better. You can charge quicker, making road side chargers possible. DIY guys will get busy retrofitting older ICE cars with batteries and a motor.
Whats not to like about this? Tesla may have opened the door but the flood is coming and I am afraid their manufacturing mistakes will destroy them.

Understand that TESLA is moving to China to lower cost and increase production to meet both the local market and export to Asia and EU?

A new smaller lower cost BEV may be in the wind?

An added battery mega plant using new technologies could help too?

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