Tesla blames 'bottleneck' as only 260 Model 3s produced in Q3

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According to Tesla, the Model 3 production was less than it predicted due to "production bottlenecks".

Tesla said most of the lines at the Gigafactory, its battery plant in Nevada, and its auto assembly plant in California were meeting their production targets, but that "a handful have taken longer to activate than expected".

Model 3 only started production in July and orders have topped 450,000 vehicles, he said.

That sounds reasonable unless you remember that Tesla has said that it will deliver 500,000 vehicles in 2018, and with production seemingly capped at around 100,000 for Model S and Model X, the bulk of that has to be Model 3.

Analysts caution that it is still early days in the production schedule for the new Model 3 and that Tesla will be working hard to ensure that everything is working correctly before volume is ramped up.

While Model 3 may have disappointed, Tesla reported a 17.7-percent sequential increase and 4.5-percent year-over-year increase in combined Model S and Model X deliveries, representing the segments' best quarterly performances. Tesla delivered 47,700 Model S and Model X cars in the first half of the year. Boasting a range of 220 miles and a price tag of around $35,000, it is also one of the more affordable electric cars on the market.

Tesla's third quarter 2017 update had some positive numbers, but there were some concerns as well.

Tesla delivered just over 22,000 vehicles in the second quarter. During the third quarter, however, the American automaker managed to produce 260 Model 3 sedans, delivering 220 of them to customers. Demand for the Model 3 has been strong, with Tesla estimated to have notched over 450k reservations for the vehicle, with current waiting periods estimated at between 12 to 18 months.

In August, Tesla expected to be producing 5,000 a week by the end of December. He noted that internal combustion engines have up to 10,000 parts, while Tesla's Model S only had 20 moving parts. There have been reports that it may consider relaxing rules that require foreign automotive companies to have a local partner, potentially allowing Tesla to manufacture its vehicles in the country. The production and sales for Model 3 is expected to go in full swing for Q4.

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