October auto sales strong, Tesla delays production goals

October auto sales strong, Tesla delays production goals

Traditional automakers celebrated better-than-expected results for October while Tesla officials delayed Model 3 targets to 2018.

November 2, 2017

A robotic welding cell assembles Tesla Model 3 bodies in California. Tesla officials had set a 5,000-vehicles-per-week production target for year-end 2017, but its best lines are now only up to 1,000-vehicles-per-week. Company officials have pushed higher production targets to the end of 2018's first quarter.

Cleveland, Ohio – Tuesday was a good day for most mainline automakers but a bad one for Tesla. October auto sales exceeded expectations, staying close to the 18+ million vehicle annual pace reached in September as pickups gained strength.

Tesla, a company that doesn’t report monthly sales figures, reporting earnings with several pieces of bad news for investors. The electric car company will not meet its goal of producing 5,000 Model 3 cars per week by the end of the year, as it had been promising, pushing that target to the end of 2018’s first quarter.

”Several manufacturing lines, such as drive unit, seat assembly, paint shop, and stamping, have demonstrated a manufacturing ability in excess of 1,000 units per week during burst builds of short duration. Other lines, such as battery pack assembly, body shop welding, and final vehicle assembly, have demonstrated burst builds of about 500 units per week and are ramping up quickly,” Tesla CEO Elon Musk and Chief Financial Officer Deepak Ahuja wrote in the investor letter. “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.”

With about 500,000 Model 3s pre-ordered (with customers putting down deposits) Musk had set a 250,000 annual production target to be reached by the end of this year. Pushing that production target back means some Model 3 customers may have to wait many more months than expected, and hundreds of thousands of those customers have already been waiting for more than a year for the car.

To focus more on getting Model 3 production problems solved, Tesla officials say they’ll cut back on production for the Model S sporty sedan and Model X crossover.

Despite Tesla’s struggles, most automakers were celebrating strong sales numbers on Tuesday. Ford, Toyota, Honda, Nissan, and Volkswagen all turned in gains, better-than-expected gains in most cases. General Motors’ numbers were down slightly, leaving only Fiat Chrysler Automobiles (FCA US LLC) and Hyundai/Kia in sharply negative territory.

For Ford especially, but all automakers generally, truck sales were great while car sales lagged. F-Series pickup sales jumped 16%, pulling the entire company up 6.2%.

FCA, down 13%, continues to cut down on sales to rental-car fleets, dropping that segment 43%. So, while it continues to post double-digit declines while other automakers gain, its remaining sales are more profitable and should be more stable in the future.

About the author: Robert Schoenberger is the editor of Today's Motor Vehicles and a contributor to Today's Medical Developments and Aerospace Manufacturing and Design. He has written about the automotive industry for more than 17 years at The Plain Dealer in Cleveland, Ohio; The Courier-Journal in Louisville, Kentucky; and The Clarion-Ledger in Jackson, Mississippi.