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Tesla Delays Model 3 Production Goal Again

Tesla Inc. (TSLA) pushed back a production target for its Model 3 again and shipped fewer of the sedans than expected.

The company now expects to assemble 5,000 Model 3s per week milestone by the end of the second-quarter, delaying plans to reach that milestone by another three months. Tesla delivered 1,550 Model 3s in the fourth-qurter of 2017.

The company initially planned to make 5,000 units per week milestone by the end of last year.

Tesla said, "As we continue to focus on quality and efficiency rather than simply pushing for the highest possible volume in the shortest period of time, we expect to have a slightly more gradual ramp through Q1, likely ending the quarter at a weekly rate of about 2,500 Model 3 vehicles. We intend to achieve the 5,000 per week milestone by the end of Q2."

In the fourth-quarter, Tesla delivered 29,870 vehicles, of which 15,200 were Model S, 13,120 were Model X, and 1,550 were Model 3. This was once again our all-time best quarter for combined Model S and X deliveries, representing a 27% increase over Q4 2016, and a 9% increase over Q3 2017, our previous best quarter.

In total, the company exceeded our previously announced guidance by delivering 101,312 Model S and X vehicles in 2017. This was a 33% increase over 2016.

In addition to the fourth-quarter deliveries, about 2,520 Model S and X vehicles and 860 Model 3 vehicles were in transit to customers at the end of the quarter. These will be counted as deliveries in Q1 2018.

The fourth-quarter production totaled 24,565 vehicles, of which 2,425 were Model 3. As we previously indicated, we slightly reduced Model S and X production in the fourth-quarter because of the reallocation of some of the manufacturing workforce towards Model 3 production, which also caused inventory to decline.

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