Tesla reported Q1 2018 vehicle production of 34,494 vehicles—a 40% increase from Q4 and its most productive quarter. Of the total, 24,728 (72%) were Model S and Model X, and 9,766 (28%) were Model 3.
The Model 3 output increased fourfold over last quarter. Tesla was able to double the weekly Model 3 production rate during the quarter by addressing production and supply chain bottlenecks, including several short factory shutdowns to upgrade equipment.
In the past seven days, Tesla produced 2,020 Model 3 vehicles. In the next seven days, it expects to produce 2,000 Model S and X vehicles and 2,000 Model 3 vehicles. Tesla shares were trading up around 3.0% at mid-day following the announcement, recouping some of the earlier losses.
Tesla said that given the progress made thus far and upcoming actions for further capacity improvement, it expects that the Model 3 production rate will climb rapidly through Q2. Tesla continues to target a production rate of approximately 5,000 units per week in about three months, laying the groundwork for Q3 to have the long-sought ideal combination of high volume, good gross margin and strong positive operating cash flow.
As a result, Tesla said, it does not require an equity or debt raise this year, apart from standard credit lines.
Q1 deliveries totaled 29,980 vehicles, of which 11,730 (39%) were Model S, 10,070 (34%) were Model X, and 8,180 (27%) were Model 3. Net orders for Model S and X were at an all-time Q1 record, and demand remains very strong, according to the company.
Model S and X customer vehicles in transit were high. 4,060 Model S and X vehicles were in transit to customers at the end of Q1—68% higher than at the end of Q4 2017. An additional 2,040 Model 3 vehicles were also in transit to customers. These vehicles will be delivered in early Q2 2018, which keeps the company on track for its full-year 2018 Model S and X delivery guidance.
Tesla also said that initial customer satisfaction score for Model 3 quality is above 93%—the highest score in Tesla’s history.
Net Model 3 reservations remained stable through Q1. The reasons for order cancellation are almost entirely due to delays in production in general and delays in availability of certain planned options, particularly dual motor AWD and the smaller battery pack.