Tesla is struggling to build the Model 3 — here’s why

Tesla Model 3The Tesla Model 3.Timothy Artman/Tesla


Tesla’s third-quarter delivery numbers were both impressive — and depressing. The carmaker is on pace to sell 100,000 vehicles in a year for the first time in its 14-year history. But it’s also far, far behind with the production of its new Model 3 sedan, the vehicle that’s supposed to bring Tesla to the masses and spell the beginning of the end for gas-powered cars.

Tesla said that it would produce 1,500 Model 3s in September; it has managed fewer than 300 since the car was launched in July.

Getting to 20,000 in monthly production by December now seems like a hopeless expectation, as does CEO Elon Musk’s prediction that Tesla will be manufacturing 500,000 vehicles annually by the end of 2018.

This means that the half-million pre-orders for the Model 3 could go unfulfilled for several years, putting a huge number of $1,000 refundable deposits for each new car in doubt. That threat is real, but the markets are unconcerned. Tesla stock is still up 65% in 2017 and the brand has lost none of its captivating aura.

But it’s also obvious that for a carmaker that’s been around as long as Tesla shouldbe good at, Tesla isn’t: building vehicles.

So why is Tesla struggling to build the Model 3 on its own admittedly ambitious schedule? There are five main reasons:


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