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Tesla Model 3 production is increasing to 5,000 units per week, say suppliers

Several Tesla suppliers are now reporting that Model 3 production is increasing rapidly and they are back to working on Tesla’s guidance of 5,000 units per week in December, which was delayed last month.

In October, a few days before Tesla’s earnings and the announcement of the Model 3 production ramp-up delay, Taiwanese auto component maker Hota Industrial Mfg. Co announced that Tesla slashed its orders for Model 3 parts by 40% (5,000 per week to 3,000).

Now the same supplier, which makes gears and axles, told Taiwanese media that Tesla increased the demand for parts back to 5,000 units per week this month.

Chairman Shen Guorong even said that they now have to mobilize the whole company and work overtime in order to comply with the change and that they are even shipping parts by airplanes instead of boats.

The report also cites other Taiwanese suppliers for Tesla’s Model 3 saying that production is now increasing following the bottlenecks.

Electrek’s Take

While it’s certainly great news that the suppliers have to increase their production sooner than anticipated – at least following the announced delay, it’s important to keep in mind that there can be an important delay between the part orders and the actual assembly due to transit time.

If the parts are being produced at 5,000 per week now, it can take up to a month before Tesla can put them in a Model 3, which would mean that the 5,000 per week production level would be achieved in January. Though it’s still earlier than the end of Q1 2018, which was the anticipation since the delay announced last month.

But if they are even shipping by air, that’s a very good indicator of a production increase in the short-term.

As we reported yesterday, Tesla is definitely ramping up Model 3 deliveries this week, but the level of deliveries wasn’t high enough to correlate it to a significant production increase just yet.

But it’s now starting to make more sense with this new information coming from the supply chain.

After the announcement of the delay, Musk changed his guidance to “a few thousand units per week” in December. It looks like it might be happening. Maybe we should expect new batches of invitations to configure the Model 3 to be sent out to regular reservation holders.

What do you think? Let us know in the comment section below.

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