While first-quarter output was just 480 vehicles shy of Tesla's target, the company's inconsistent production numbers leave analysts skeptical that the carmaker can steadily increase its rate in the second quarter.
Tesla declined to comment on the record for this report, but pointed to statements about future production plans. "In the past seven days, Tesla produced 2,020 Model 3 vehicles," the company said in a statement Tuesday, April 3. "In the next seven days, we expect to produce 2,000 Model S and X vehicles and 2,000 Model 3 vehicles."
After the company reported that it had produced 793 Model 3 sedans in the last week of the fourth quarter of 2017, Bloomberg's Model 3 output model, which tracks registered vehicle identification numbers, shows the rate stayed well below 1,000 vehicles until the last week of March.
"More important than a quarter-end all-out production push is the sustainability of production over the quarter — and the first quarter result did not give us any sense of sustainability," wrote Brian Johnson, a Barclays analyst, in a note to investors. "We expect production to come down significantly as Tesla addresses its bottlenecks in preparation for ramping to higher levels."
Tesla is well behind the rest of the industry when it comes to ramping up production.
Ron Harbour, a manufacturing consultant with Oliver Wyman, said, "When you're getting a factory to 1,000 cars a day, if that takes a month or two, you're doing badly."
And, as Tesla enters the mass-market segment of the industry, expectations for vehicle quality and consistency will differ from the relative tolerance it has seen from its typical first-adopter customer in the luxury market.
Brauer said, "The jump to high volume, it's different on so many levels. It's about the number of cars you can consistently produce with high quality. You have everything lined up to build 2,020 vehicles in one week, that's excellent, but can you do that for 52 weeks or more?"
In its first quarter delivery report, Tesla said it would not need to raise more capital for the rest of 2018.
"Tesla continues to target a production rate of approximately 5,000 units per week in about three months, laying the groundwork for [the third quarter] to have the long-sought ideal combination of high volume, good gross margin and strong positive operating cash flow," the report read. "As a result, Tesla does not require an equity or debt raise this year, apart from standard credit lines."