Tesla’s Model 3 production problems stem from a small number of suppliers that have failed to deliver on time, according to Oppenheimer & Co.
At least one of those suppliers has been fired, Oppenheimer & Co analysts wrote in a research note emailed to Coins2Day on Monday. The investment bank shared its insights on Tesla following a dinner it hosted for the automaker.
Earlier this month, Tesla reported it produced 260 of its new Model 3 electric cars in the third quarter, of which it delivered 220, dramatically missing CEO Elon Musk’s prediction that the company would produce more than 1,600 cars by September.
After announcing that the first 30 customers would receive the Model 3s on July 28, Musk wrote “production grows exponentially, so Aug should be 100 cars and Sept above 1,500.” Altogether, Tesla should have produced 1,630.
Musk handed over the first 30 Model 3 electric cars to Tesla employees at a splashy event July 28. Critics have warned that the company might struggle to reach those aggressive production numbers and has caused some workers to put pressure on management to meet the demands of a union effort.
The Oppenheimer note follows a WSJ report that as recently as early September, major portions of the Model 3 were still being built by hand, away from the automated production line. Musk recently delayed the unveiling of an electric semi-truck until Nov. 16 so the company can focus its attention on the new mass-market car’s production problems.
Tesla has told Oppenheimer that all the production equipment for Model 3 is installed and working and that all vehicles were moving through the manufacturing line, according to the note.
Tesla still believes that once it reaches volume production it will achieve margins of 25% on the Model 3 on versions of the electric car that are priced in the mid-$40,000s, Oppenheimer said. The Model 3 base model begins at $35,000. However, the company is focused on producing and delivering higher-end versions of the Model 3 that have longer range and premium upgrades.
Tesla told Oppenheimer that the base model is profitable, but didn’t provide details on what marginsits most basic offering would be have.
Oppenheimer is maintaining its previous estimates that Tesla will deliver 3,005 Model 3 vehicles in 2017. The firm forecasts 100,056 total Tesla deliveries in 2017, a figure that also includes the Model S and Model X.
