Is Tesla Model 3 Exploding On the Launch Pad?

Tesla is now dramatically behind its promised delivery schedule. Has the Tesla Model 3 effectively failed to launch?

"Freemont, we have a problem." Tesla promised to ship more than 5000 Model 3s in October. However, the company could only build an estimated 145 cars. Tesla has been saying for years that this was the model launch that would change everything and propel an electric vehicle into the mainstream. So far, all we have seen is a fizzle and another embarrassment by an automaker that just can't seem to actually build cars.

The Model 3 launched in July, so we are now into the fifth month since the first car was delivered. Every other automaker in the world would have fully tested and verified not just its prototype vehicle before the launch, but also its production system. Building machines as elaborate as cars requires exact specifications and work process controls. Building consumer cars by hand is a recipe for disaster. Tesla knows this, having flubbed the Model X launch. Tesla is still working out details that should have been set in stone a year ago.

Wired reports that Elon Musk said that the main production delay has to do with automating the battery manufacturing. Musk said, "We had to rewrite all of the software from scratch and redo many of the mechanical and electrical elements," he added. "This is what I’ve spent many a late night at the gigafactory working on." Any owner who got one of the hand-built battery packs, or will receive one of the "beta" automatically-built battery packs should be horrified to hear this. Tesla is effectively engineering the production of this vehicle on the fly.

Five months into the production of the Model 3, Inside EVs has calculated using registration data (because Tesla withholds the bad news on production until forced to disclose it) that Tesla has delivered just 367 Model 3 vehicles. Musk himself owns the first one, "gifted" to him by a fellow Tesla board member, rather than auction it for charity, or delivered to an actual buyer who had been waiting. Almost none have been sold outside of California, and as far as we can surmise, none have been sold yet to private owners who are not also employees of Tesla. Even the 367 units that have been sent out are really hand-builds delivered to people who risk a job retaliation if they complain about quality.

In early July, Elon Musk tweeted, "Handover party for first 30 customer Model 3's on the 28th! Production grows exponentially, so Aug should be 100 cars and Sept above 1500." By our reading of the Tesla tea leaves, Tesla had planned to have delivered about 7,000 cars by the first week in November. Here we are at that point, and Tesla has shipped about 1/20th of its promise.

The Model S and Model X are not holding the Model 3 back. In October, the two combined to about 2,000 car deliveries in the U.S.. The Chevy Bolt easily outsold Tesla's entire U.S. deliveries of all its cars. The Volt, Prius Prime and Chrysler Pacifica each outsold every Tesla model individually as well. Funny, the media doesn't seem to be covering the Prius Prime and Pacifica. Go figure.