• 5 minutes 'No - Deal Brexit' vs 'Operation Fear' Globalist Pushback ... Impact to World Economies and Oil
  • 8 minutes China has *Already* Lost the Trade War. Meantime, the U.S. Might Sanction China’s Largest Oil Company
  • 12 minutes Will Uncle Sam Step Up and Cut Production
  • 1 hour Danish Royal Palace ‘Surprised’ By Trump Canceling Trip
  • 8 hours A legitimate Request: France Wants Progress In Ukraine Before Russia Returns To G7
  • 44 mins China has invested btw $30 - $40 Billon in Canadian Oil Sands. Trump should put 10% tariffs on all Chinese oil exported into or thru U.S. in which Chinese companies have invested .
  • 16 hours Recession Jitters Are Rising. Is There Reason To Worry?
  • 7 hours Used Thin Film Solar Panels at 15 Cents per Watt
  • 44 mins US to Drown the World in Oil
  • 11 hours IS ANOTHER MIDDLE EAST WAR REQUIRED TO BOLSTER THE OIL PRICE
  • 5 hours Strait Of Hormuz As a Breakpoint: Germany Not Taking Part In U.S. Naval Mission
  • 3 hours Iran Is Winning Big In The Middle East
  • 49 mins With Global Warming Greenland is Prime Real Estate
  • 1 hour Tit For Tat: China Strikes Back In Trade Dispute With U.S. With New Tariffs
  • 21 hours Domino Effect: Rashida Tlaib Rejects Israel's Offer For 'Humanitarian' Visit To West Bank
  • 20 hours NATGAS, LNG, Technology, benefits etc , cleaner global energy fuel
  • 8 hours LA Solar Power/Storage Contract

Tesla Still Struggling With Production, But Skies Are Beginning To Clear

Tesla

After releasing its worst quarterly figures ever, Tesla said it will delay the full-scale production of its Model 3 to early 2018, from December this year. Now, the company plans to churn out 5,000 Model 3s weekly starting some time in March next year, after announcing a total production of just 260 cars of the affordable model in the third quarter and deliveries of 220. Plans were to produce 1,500 Model S between July and September.

The biggest problem seems to be the new battery that Tesla is developing. This battery should make the Model 3 cost-effective, but progress on it was hampered by problems with subcontractors, the major degree of automation in the gigafactory where the Model 3 is manufactured, and other issues in the third quarter of the year, leading to delays.

Now, however, the skies ahead look brighter, according to Elon Musk, although the Tesla CEO declined to give an estimate of when Model 3 production will reach 10,000 per week – given the uncertainty surrounding what other challenges may crop up along the way.

Meanwhile, Tesla delivered a record number of its other two models during the third quarter, at 25,915 combined, with annual deliveries of the two models seen to hit 100,000, up 30 percent from 2016. In the fourth quarter, however, Tesla will cut production of Model X and Model S, as it continues to direct more resources to Model 3.

Related: Trump’s China Trip To Reap Billions In Energy Deals

It’s Model 3 that analysts see as the main stumbling block in front of the electric car maker. According to UBS, there are more challenges with it to overcome, and Tesla will continue to burn cash in its attempts to do that. Model 3 is also seen as the culprit behind the larger than expected quarterly loss Tesla reported yesterday, at US$619 million, although revenues were up by an annual 30 percent to US$3 billion.

Yet it’s easy to see the reason for the focus on Model 3: this is the first affordable Tesla, at US$35,000 and it is widely seen as the ultimate guarantee of the company’s future profitability. Given that Tesla is doing some things for the first time in the auto industry, including the degree of automation in the manufacturing process, stumbling blocks are only to be expected.

By Irina Slav for Oilprice.com

More Top Reads From Oilprice.com:



Join the discussion | Back to homepage

Leave a comment
  • kafantaris on November 02 2017 said:
    Skies are beginning to clear? Quite the opposite. Rather, it looks like the underlying problem with the Model 3 is more fundamental than even the doomsayers thought. Maybe we should have suspected something was wrong when Tesla’s longtime battery scientist and battery technology director, Kurt Kelty, suddenly left the company in July. Back then, Tesla did not hint at the depth of its pain, saying only that Kelty’s responsibilities will be “distributed among Tesla’s existing teams.” But there could have been no such teams to pick up the slack if Kelty had left because he hit an impasse with the battery technology -- the same impasse that Elon Musk is forced to deal with now.

Leave a comment

Oilprice - The No. 1 Source for Oil & Energy News
Download on the App Store Get it on Google Play