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Tesla Sets Smaller Goal of 2,500 Model 3 Cars Per Week

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Feb. 9, 2018— Tesla had originally aimed to be making 5,000 Model 3 cars per week by the end of 2017, but the company has changed that deadline twice. On Wednesday, the company reiterated reaching 5,000 by the end of the second quarter and set a smaller goal of 2,500 per week by the end of the first quarter, reported CNBC

Tesla also acknowledged battery production issues at its Gigafactory in Sparks, Nevada. It said it has created automatic assembly lines to resolve the problem, but the lines are in Germany, and they need to be disassembled, shipped and reassembled in Nevada.

Tesla expects that to happen before the end of the quarter.

In the meantime, parts of its assembly line have been "semiautomatic," meaning people are filling in gaps on the line. Tesla ultimately wants to automate as much of its assembly lines as possible.

"We view the 2,500 target in March, in particular, as extremely aggressive due to management's acknowledgment of needing to get the robotic equipment in Germany disassembled, shipped to the US, and then reassembled and programmed in order to hit roughly 2,000 to 2,500 units per week," Cowen analyst Jeffrey Osborne said in a note Thursday.

There is also a production constraint at Tesla's automated material conveyance system in the company's factory in Fremont, California, but CEO Elon Musk said improving that system "appears to be on track."

"So, we feel like the error bars around the unit volume predictions are getting smaller with each passing week," Musk said on a conference call on Wednesday.

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