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Report: Tesla Slashes Part Orders By 40 Percent For Model 3

Troubling times may lay ahead at Tesla after a Reuters report broke news the Silicon Valley automaker cut part orders by 40 percent, starting in December. The company continues to have difficulty producing the affordable mass-market Model 3.

CEO Elon Musk said on numerous occasions the Model 3 remains deep in “production hell,” but slashing part orders forecasts a much lower output than first anticipated. The part orders, from Taiwanese parts maker Hota, are reportedly for gears and axles.

Tesla was scheduled to take delivery of 10,000 part sets per week by March 2018, and Musk previously believed the company would produce 5,000 cars weekly by next year. Additionally, it’s believed the few hundred Model 3s delivered were all hand-assembled. It’s a tough situation when 455,000 customers committed to their own Model 3.

This leads us to our own question: is GM vindicated? The automaker produces the Chevrolet Bolt EV as a true mass-market electric car and there are certainly no shortages. In the end, the Model 3’s bottlenecks will test Tesla’s brand power. Will customers remain loyal, or will they seek out zero-emission cars elsewhere as Tesla’s competitive advantage quickly becomes an industry standard?

Former GM Authority staff writer.

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Comments

  1. Tesla knows they cannot compete with the powers of GM, VW, and others. The big brands have too much expertise in automotive manufacturing and processes. Tesla is not an auto company, hence the drop of “Motors” from the original “Tesla Motors” name. They are an alternative energy company and industry disruptor. They played their part in proving that there is a market for electric vehicles and that cars with that powertrain can be fun and effective. Now, seeing the opportunity and leveraging their powers, the larger automakers will step in and take the market. Tesla knows this. They have made their patents and innovations public for others to use. I was surprised at the move toward a mass market vehicle for the reasons I just listed: the big brands will crush them in production. If I were Tesla, I would have sustained a premium market approach with lower volumes and collaborated with the larger brands to fill the mass market segment.

    Reply
    1. So if the whole thing was just a sham to “bring electrification to the spotlight” without ever being serious about making money, spending countless billions of investor and taxpayer money on the big ruse/ sham/ scam and ruining thousands of workers lives in the process based on false hope, then Elon Musk and his minions in the press and elsewhere who piloted the ultra-hype maching can be sued into the stone age for fraud?

      You do realize GM was way before TESL in introducing electrification and the skateboard platform?

      Reply
      1. I never said GM didn’t test out the idea of electric vehicles before, I am saying that Tesla made the market. Sure GM had the tech and platforms, but until Tesla changed the image around electric vehicles, there wasn’t enough demand for GM to bring them to market like they will over the coming years. Tesla took the bold moves to make electric cars fun, practical, and good looking. Now GM and others will flood the market with offerings.

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    2. Well encapsulated comment, David, but I do think that Tesla’s brand strength will allow it to carry on. 455,000 customers waiting for the model-3 is not a small number for a start-up brand.

      In the circles I run in where the conversation often runs to the Environment and alternative energy and economies, the desire for a Tesla EV is strong, I liken part of it to the desire for some to have a BMW or MB, only a Tesla will do. People will wait, or I think enough will wait to allow Tesla to get its feet under it and planted so it can continue as a viable player in this growing market. If not, we still have a lot to thank Tesla/Musk for.

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    3. Gee….I wonder why VW and GM keep delaying their BEV efforts. Even the Bolt is limited to a very low production number based on what Obama’s liberal socialist judges made GM promise to build in exchange for a more benign ignition lawsuit settlement. Daimler keeps delaying it’s electric models even longer…’VW and GM were too much at the mercy of liberal socialist judges to follow Daimler’s strategy.

      BEVs are ridiculously easy to build….Even a vacuum maker and an airline owner are getting into the business. If GM, VW and Daimler wanted to, they could be all-electric by now. What is it that is stopping them from fulfilling Obama’s and Michelle’s dream of all Americans driving their children in TESLAS and other BadEvilVile electrics? I can tell you this….Michelle and Obama and Musk know exactly what that is…and they still want all Americans to drive their children in TESLAs.

      Reply
      1. Ace, your Tin foil hat is seriously askew. Ace, another victim of Faked News/Noise.

        Reply
      2. I knew an Ace growing up.

        He was baked.

        You are baked as well. Is that you Ace?

        Reply
  2. I don’t know if there’s any positive in being “vindicated”. And I doubt GM is after “vindication”.
    Although I’m not a fan of Tesla and I’ve pointed many times at the horrible financials behind it, the company had the merit to bring electrification back to the spotlights, and therefore (in)directly also accelerated the technologies that go with it.
    With a class action lawsuit around the corner for a “fully autonomous autopilot” system for which owners paid up to 8000 USD and that does not deliver on its promise, the continuous replacement of the Autopilot management, and visible inability to deliver on its Model 3 production, in addition to an ever-stiffening competition and continued negative financial results, it is clear to me what Tesla’s future looks like.
    Tesla likes to position itself as a “technology company” rather than a “car company”. In that case, Tesla must do what their technology competitors do: stick to its core competence (electrification) and have cars build by other manufacturers. GM could be an ideal manufacturing partner, and Cruise Automation could be the savior for the Autopilot system. I see win-win here.
    In addition, it would be mostly US-made and not semi-Taiwan made.
    If things continue like this, the only automotive technology company in the US will be GM and not Tesla.

    Reply
    1. Two almost idenitcal “position itself as a technology company” posts that are almost the exact same length and content from new people on here smells fishy…I smell Tesla counter-negative news propaganda team at work (well known in the industry) and blood in the water.

      Either way, this is just further confirms TESLA as a car company is collapsing and the hype was, well, HYPE. GM got it right in ignoring the hype and naysayers and playing the long game based on sound investment fundamentals and long-term market strategy. TESLA was just a fad, and like all fads, will die a horrible and quick death as a carmaker.

      Reply
      1. I hate to ruin your conspiracy, but I’ve been reading and posting on GM Authority for years. And it’s a pretty common view among people that Tesla is better off as a tech company. Nothing “fishy” here.

        Reply
        1. Nothing “fishy” about TESLA???? Hmmmm….I suppose there is nothing “fishy” about a CEO who is Obama’s greatest hero….who made $billions on liberal socialist policies that are intended to kill off fossil fueled vehicles. I suppose there is nothing “fishy” about s CEO who is involved in child experimentation, who has admitted to being Looney Tunes…..who thinks we are all just stuck in a virtual reality simulation….a Matrix.

          No….”fishy” is not quite the word that comes to mind.

          Reply
          1. Mental illness for all to see.

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      2. Gee….I wonder why VW and GM keep delaying their BEV efforts. Even the Bolt is limited to a very low production number based on what Obama’s liberal socialist judges made GM promise to build in exchange for a more benign ignition lawsuit settlement. Daimler keeps delaying it’s electric models even longer…’VW and GM were too much at the mercy of liberal socialist judges to follow Daimler’s strategy.

        BEVs are ridiculously easy to build….Even a vacuum maker and an airline owner are getting into the business. If GM, VW and Daimler wanted to, they could be all-electric by now. What is it that is stopping them from fulfilling Obama’s and Michelle’s dream of all Americans driving their children in TESLAS and other BadEvilVile electrics? I can tell you this….Michelle and Obama and Musk know exactly what that is…and they still want all Americans to drive their children in TESLAs.

        It’s gonna be a lot uglier than just a death of a BEV maker.

        Reply
  3. Failure of any electric is not going to help the segment.

    But few outside the fantasy bubble find this a surprise.

    Tesla would have been better off making a better S model and a better expensive SUV model.

    To compete in the lower end segment for a while will require income from other products like trucks and CUV models that are very profitable till the segment is ready to roll on its own.

    Now GM must capitalize on this possible void with their 20 promised models. They need to be right, affordible and on time.

    Tesla could pull back and go back to lower volume high end models and pull this out but it may be too late already as they may just not have the cash flow to go back.

    Reply
  4. Tesla is feeling the heat.. of direct competition and it’s just going to get worst in the next couple of years given General Motors CEO Mary Barra disclosing how the company would be introducing 20 new electric vehicles by 2023 meaning Chevrolet’s Bolt will be joined by 3-5 new EVs by possibly as early as 2020; thus, the days of Elon Musk being vague with his answers and when Tesla will have a vehicle ready for production needs to be exact because consumers will have a number of EV choices in a few years time.

    Reply
    1. Yes, all the countless men and women who will have designed, built, and marketed the new electrified vehicles. Electrification started way before Barra was placed in her position (no democratic vote necessary), but she will be the spokeswoman for it in the next few years.

      Reply
  5. I think everyone on the Model 3 waiting list knows that Tesla is not as good at manufacturing cars as quickly as any established brand. If GM begins cranking out electric cars that look as good as the Buick Avenir or Buick Avista concept cars of recent years at the pace that they can build the Chevy Bolt…then they can start getting defectors from Tesla. I’m not really sure GM wants this level of volume yet.
    I also think if GM had made the 1st Generation Volt look exactly like the Volt concept car it would have been the number 1 hybrid for the past 7 years. Style is easily overlooked in pursuit of the hard numbers though.

    Reply
    1. There is a problem with the Volt Concept. It was not a real car.

      The styling was for a show car to attract attention not range. They changed the car as the show car would have fallen very short in range.

      The small things on the production Volt like the squared off corners on the rear bumper added aero that provided 5-7 miles in range. The large wheels on the show car added much weight that would take away range.

      There is a good book by Larry Edsel that GM endorsed on the Volt. It really shows the details and transformation of the how and whys of the Volt.

      I do agree GM is trying to grow the market but realizes it has to come with customer acceptance. Let’s face it EV cars are still not for everyone yet. But they will continue to lead on development and be a major player as acceptance and regulations require more EV cars.

      Reply
  6. I think what is missed here is a Tesla is collapsing on themselves even before GM Nd the competition got to them.

    The reality is Tesla had planned to take the S money to fund the X and then the X money to fund the 3.

    Well the X failed to provide the a Capital to fund the 3 and time S is not able to sustain it all by its self.

    The resorted to additional stock sales and pre selling the 3 to gain capital to finish the car.

    Now the are having trouble going into production and are burning cash. They are cutting staff and purchasing as they have too little funds moving ahead at the speed the planned.

    Now much of the government funds have been depleted or will be depleted soon.

    This was a plan that. A lot of things had to work right and if only one failed it would bring major cash flow issues.

    While the media has been all over this story like GM and Tesla were fighting it out the truth is both were doing their own thing.

    GM started their program with the Impact and has progressed it from there. They never reacted to any of the Tesla models and they continue to evolve their programs to bring cost down in improve the range of the cars.

    Tesla on the other hand just did what the could do to get to the next step. But they lost a step and the jump up just got higher.

    I have always said the smart move for Tesla was to get out of car building and build EV systems as a supplier to auto mfg that can not go it alone like GM.

    In other words be the Intel of EV cars.

    Most of the real money makers in the computer segment were suppliers not the unit builders.

    Even Apple has to get phone screens from Samsung.

    Too many gave Musk too much credit ad he does not walk on water. He did not even do PayPal alone as he was only one of several involved with their creation.

    GM will stay the path and continue their plan. Tesla may sell out or merge. The story of their path will be told several ways for years.

    Reply
  7. MUSK- Another Liberal Moonbat.

    Reply
    1. “MUSK- Another Liberal Moonbat.” … Possessing an intellectual capacity well beyond your comprehension.

      Reply
  8. I would suggest that GM just on Tesla’s situation and market the hell out of the Bolt and Volt to all those on the waiting list for a Model 3. Make deals with the people on the waiting list to sell/lease them a Bolt and/or Volt until their Model 3 is available. Maybe they just might change their minds and stay with a proven vehicle from GM.

    Reply
    1. That’s a very good idea, but that’s way too gutsy, innovative, and obvious for GM. Expect that kind of thinking to come from BMW or Toyota. “Dare Greatly” is just a marketing slogan.

      Reply
  9. Chevy should offer a special Bolt lease to people who have money down on the 3.

    Odds are slim many will see their 3 by the time a 3 year lease is up.

    Call it the drive now while you are waiting lease.

    Reply
    1. Not a bad idea, Scott.

      Be nice if the Bolt had a little more cool factor, but a good disruptive move.

      Reply
      1. It will not sway the Musk Following but it would be great PR for public opinion.

        The cool factor will come with advancement and lower prices.

        Let’s face it the 3 of any real value is going to cost more than the Bolt.

        Reply
      2. A “cool” car is not a good car. The insides and the powertrain is what makes a car good. Others just see the outside.

        Reply
        1. A good car can be made very compelling. In this case the parameters of keeping cost down and range up requires some compromise in styling and size.

          With more advancements this will change for the better.

          The S proves more money and size can be easily done but to keep in the $35k range and keep range up size and shape matter while still able to haul things.

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        2. Right, I didn’t mean eye candy at the expense of superior performance.

          Just some design enhancements.

          Reply
    2. Cool idea, but sounds a bit like “Get a minivan while you wait for your 3 series”.

      Reply
  10. GM will never get credit for what they do! We no that they should!

    Reply

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