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