Broken promises

On February 22nd 2017, the Model 3 program is still “on track” for the start of limited production in July, ramping to 5000 cars a week in the fourth quarter and 10’000 vehicles per week at some point in 2018. The target of half a million cars made in 2018 has implicitly – mathematically – been dropped. At the half year mark, the increase in production capacity morphs gradually from a challenge to a question mark to an outright failure.

On July 3rd 2017, Elon Musk promises:
– 30 cars ready for delivery on July 28th
– 100 cars made in August
– 1,500 cars made in September

The production plan is revised less than a month later. On July 28th, during the presentation of the final Model 3 product, production targets are revised to 1500 weekly units mid October, 3000 weekly units mid November, and 5000 weekly units and of December. Elon Musk presents to enthusiastic crowds a S-curve shaped production ramp plan, but also – oddly – promises his employees “manufacturing hell”.

On August 2nd, repeats the same commitments: “Based on our preparedness at this time, we are confident we can produce just over 1,500 vehicles in Q3, and achieve a run rate of 5,000 vehicles per week by the end of 2017.  We also continue to plan on increasing Model 3 production to 10,000 vehicles per week at some point in 2018.”

These plans are revised – again – three months later, on November 1st:

“Based on what we know now, we currently expect to achieve a production rate of 5,000 Model 3 vehicles per week by late Q1 2018, recognizing that our production growth rate is like a stepped exponential, so there can be large forward jumps from one week to the next.  […] With respect to the timing for producing 10,000 units per week, it has always been our intention to implement that capacity addition after we have achieved a 5,000 per week run rate.”

The root cause of this postponement is presented as being related to the automated assembly of battery packs, while those used in Model S and Model X are put together manually. Tesla only delivers 222 Model 3 in the third quarter.