Tesla just delayed its production timeline for the Model 3 saying it's 'difficult to predict' when bottlenecks will clear

Timothy Artman/Tesla

Tesla Model 3.

• Tesla said in its third-quarter earnings letter that it will produce 5,000 Model 3 sedans per week by the end of the first quarter in 2018.
• Tesla initially planned to achieve that target in December.
• Tesla said the bulk of its production issues have to do with its Gigafactory in Sparks, Nevada.

Tesla is still sorting out its production issues for the Model 3.

Tesla said in its third-quarter earnings letter that it's still hard to assess when it will sort out the "bottlenecks" that delayed Model 3 production in the third quarter. The company now plans to produce 5,000 Model 3 sedans per week by the end of the first quarter in 2018 - a target it had initially planned to achieve in December.

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It only produced 260 Model 3 sedans in the third quarter, widely missing its target to manufacture 1,500 vehicles in September only.

"While we continue to make significant progress each week in fixing Model 3 bottlenecks, the nature of manufacturing challenges during a ramp such as this makes it difficult to predict exactly how long it will take for all bottlenecks to be cleared or when new ones will appear," Tesla said in the letter.

Tesla said its primary production constraint has been at the battery module assembly line at its Gigafactory in Sparks, Nevada. Panasonic CEO Kazuhiro Tsuga said on Tuesday some of the battery packs have had to be assembled by hand, slowing Model 3 output.

Tesla echoed Tsuga's comments in its letter, saying that once the production line is automated, the number of Model 3 vehicles produced will rise. Tesla said there are no issues with its supply chain.

"The Model 3 production process will be vastly more automated than the production process of Model S, Model X or almost any other car on the market today, and bringing this level of automation online is simply challenging in the early stages of the ramp," Tesla said.

The Model 3 is Tesla's first mass-market vehicle starting at $35,000. Tesla secured 455,000 orders for the vehicle as of August; some customers will have to wait over a year to receive the highly-anticipated sedan.

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