The Model 3 Bottlenecks Were Not Tesla’s Fault, Claims Oppenheimer Analysts

Reports have emerged that the Tesla Model 3's intense production schedule has resulted in some parts manufacturers getting terminated.

The saga of the Tesla Model 3 continues to get more compelling, with the automaker revealing that the mass-market EV’s notorious production bottlenecks were primarily due to problems with its suppliers, not the company’s production line itself. The news comes as Oppenheimer & Co. analysts shared the information after the investment bank hosted a dinner for the electric car firm.

In a research note sent to Fortune, Oppenheimer & Co. analysts stated that several of the Model 3’s parts suppliers have been unable to meet the carmaker’s demands. According to the analysts, one of Tesla’s parts manufacturers has already been fired and replaced after it failed to meet the timeline set by the carmaker. The manufacturer in question had reportedly been replaced by another firm through insourcing.

Tesla is known to be very bold with its parts suppliers. Earlier this year, Tesla brought the hammer down on German automotive supplier SHW, one of the Model 3’s parts manufacturers. During that time, the EV firm hit the manufacturer with a $100 million parts cancellation after SHW’s axle-drive pumps failed to meet the EV firm’s standards.

Considering that the Model 3 production is following a strict timeline, the pressure that the carmaker is giving its partners is quite understandable. The EV firm, after all, has set a number of lofty production goals for itself, with CEO Elon Musk targeting 5,000 Model 3 units per week by December.

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If any, the recent notes by Oppenheimer & Co. analysts reveal that Tesla is still trying its best to follow its own timeline. While production bottlenecks are happening because some of the company’s parts suppliers are unable to keep up with the carmaker’s demand, Tesla’s mass production equipment for the Model 3 is already installed and ready, as stated in an Electrek report.

The pressures that Model 3 suppliers are currently facing have long been teased by Tesla, with CEO Elon Musk warning manufacturers before that the supply program for the Model 3 would be hyper-competitive due to the number of vehicles being produced and the timeline that the EV firm would be following. The Tesla CEO also warned its suppliers that those who would not be able to meet the company’s demand would be relinquished.

As it turns out, Tesla was dead serious when it released that statement, as the Model 3’s intense production schedule has already begun claiming its first victims.

[Featured Image by Tesla]