Tesla falters with Model 3 as initial output trails forecast


SAN FRANCISCO • Tesla Inc struggled to produce its cheapest model shortly after the car debuted, setting back CEO Elon Musk’s mission to reach mainstream consumers.

The automaker built only 260 Model 3s during the quarter ended in September, less than a fifth of its 1,500-unit forecast. Output of the sedan that starts at US$35,000 (RM148,400) — roughly half the cost of the least expensive Model S — was lower than expected because of unspecified “bottlenecks,” according to the company.

Musk has engendered enthusiasm about the future of electric cars and has automakers including Volkswagen AG, General Motors Co and Daimler AG lining up to compete. But what Tesla hasn’t done is prove itself as a mass manufacturer. The slow start for Model 3, which was designed for easier assembly, reignites concern that the company will struggle to reach the lofty production targets set by its CEO.

“I would be surprised if anyone was surprised that they came up short,” said Sam Korus, an analyst at Ark Investment Management in New York, which holds Tesla shares. “When Musk gives a prediction, you know it’s an extraordinarily ambitious goal.”

Tesla produced 25,336 vehicles in the third quarter, down slightly from the three months ended in June. Musk warned after handing over the keys to the first Model 3 owners in July that it would be “hell” ramping up output of the car, which racked up almost half a million reservations as of early August. — Bloomberg