Tesla Reports Jump in Vehicle Production but Aims for Much More

Tesla, the electric-car maker, on Sunday reported strong year-on-year jumps in vehicle deliveries and production in the first quarter, although it still must navigate a key challenge later this year to hit the ambitious targets that its chief executive, Elon Musk, has set for 2018.

The company said it delivered more than 25,000 cars and sport utility vehicles in the first quarter, a rise of about 69 percent from the same period a year ago. The increase from the fourth quarter was smaller, however. In the final quarter of 2016, Tesla delivered 22,252 cars and S.U.V.s.

The first-quarter total is a preliminary figure that could change when the company reports its first-quarter earnings next month. Tesla also said it produced a record 25,418 vehicles in the quarter, up from 15,510 a year ago, although again the rise was much smaller when compared with the fourth quarter, when it built 24,882 cars.
 The company currently offers the Model S luxury sedan and the Model X S.U.V., both of which can sell for $90,000 or more once options are included. In July, it plans to begin production of the Model 3 — a compact car the company hopes to sell for $35,000 and produce in significantly higher volume.

Mr. Musk has said that with the Model 3 in the mix, the company is aiming to push annual production to 500,000 cars in 2018. At that rate, Tesla would need to average production of more than 40,000 cars a month, more than it now produces in a quarter.

“Sales have been good for Tesla in the last three months, but the Model 3 will be their biggest challenge yet as I imagine most of their company resources are focused on that vehicle,” said Jessica Caldwell, a senior analyst at Edmunds.com, an auto-information website.

Such a rapid expansion would tax even long-established automakers, and Tesla is moving forward with the Model 3 while taking on other challenges. It just began production at a gigantic battery plant — known as the Gigafactory — in Nevada, and last year it merged with SolarCity, a maker of solar panels that had Mr. Musk as its chairman and a shareholder.

At the same time, Tesla’s automobile business faces some uncertainty because sales are currently helped by a $7,500 tax credit the federal government offers on environmentally friendly cars. “A worry on the horizon is the Trump administration’s stance on the tax credits,” Ms. Caldwell said.

Source: New York Times