Tesla Model 3

Tesla Model 3

Following today's Q4 and 2017 results report, Tesla has updated its delivery timeline for the standard Model 3.

What was once promised to arrive in early 2018 is now expected by late 2018 or even as far off as early 2019 for reservation holders.

*UPDATE: Meanwhile, Canadian reservation holders report a moving forward of their timelines provided they opt for the long-range, more expensive version of the Model 3.

Tesla Model 3 Standard Delivery Pushed Back

Tesla Model 3 Standard Delivery Pushed Back

It's believed that Tesla is making this timeline change due to mounting losses, which it reports on the Model 3, too. If Tesla struggles to turn a profit on a ~$55,000 Model 3, then it surely can't be expected to make money off the base $35,000 3. In its released, Tesla stated:

GAAP Automotive gross margin improved slightly compared to Q3 to 18.9%. Non-GAAP Automotive gross margin declined to13.8% in Q4, which was below our expectations. This is more than fully explained by the slower than expected ramp of Model 3.Since Model 3 production was in the early stages of the ramp, allocation of full operating costs and depreciation made its gross margin negative. We are expecting a negative Model 3 gross margin in Q1, while generating positive operating cash flows.

It appears as though Day 1 reservation holders are seeing the late 2018 timeline for the standard Model 3, whereas those who reserved on Day 2 are receiving the early 2019 notice.

It seems Tesla is prioritizing the pricier version and delaying what's likely to be the money-losing standard Model 3, but that's what some of us expected to happen all along.