- We are bracing for another Model 3 production miss. This will be the third time in as many quarters that Model 3 production has fallen short of expectations.
- We believe the Model 3 production run rate exiting the March quarter will be 1,500, below company guidance of 2,500 and Loup Ventures previous expectation of 2,000 per week. This compares to production exiting the Dec-17 quarter at a run rate of ~1,000 per week.
- The reason why Model 3 production continues to miss is Tesla’s goal is to build a factory with significantly higher output than a traditional auto factory. This is the right long-term strategy but has near-term consequences.
- Model 3 likely still has a ~400,000 preorder list, a rare example of a car’s demand outpacing its supply.
- We believe Tesla will eventually get this right and capitalize on the EV and autonomous opportunity.
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