Well that didn't take long. During Q1, Tesla's (NASDAQ:TSLA) Model 3 deliveries surged past General Motors' (NYSE:GM) all-electric Bolt in the U.S., highlighting Tesla's far more ambitious plans for its most affordable electric vehicle yet.
Sure, Tesla's production ramp up for its Model 3 is running behind schedule. But it still only took about nine months for Tesla to go from its first 30 Model 3 deliveries last summer to a production rate of 2,000 units per week. Meanwhile, GM's Bolt production doesn't appear to be coming even close to this rate, despite GM's head start over Tesla's Model 3.
The Bolt had a solid first year in 2017, with about 26,000 deliveries globally. But the electric car is far from a high-volume, mass-market vehicle. For perspective, Tesla's Model S -- a vehicle that starts at $75,000 and targets the niche, high-end luxury segment -- dwarfed Bolt deliveries last year. Tesla delivered nearly 55,000 Model S in 2017. Even the automaker's Model X SUV saw deliveries of 47,000 units last year.
The Bolt's comparatively low delivery volume is even more pronounced recently, as U.S. Bolt deliveries declined 51% sequentially in Q1. Year to date, U.S. Bolt deliveries are just 4,375 units.
In the meantime, quarterly Model 3 deliveries in the U.S. have surged to over 8,000 units. Further, Tesla's current weekly production rate for Model 3 extrapolates to a quarterly run rate of about 26,000 Model 3s per quarter.
This is only the tip of the iceberg for Tesla
Though Tesla is behind its initial production targets for Model 3, the company's progress is still impressive. As Tesla said in its first-quarter update on vehicle deliveries and production, the Model 3's production is increasing at a much faster rate than production for Tesla's Model S and X.
"In the past seven days, Tesla produced 2,020 Model 3 vehicles," Tesla noted in its April 3 update. The company continued:
In the next seven days, we expect to produce 2,000 Model S and X vehicles and 2,000 Model 3 vehicles. It is a testament to the ability of the Tesla production team that Model 3 volume now exceeds Model S and Model X combined. What took our team five years for S/X, took only nine months for Model 3.
Importantly, Tesla pulled this off with an initial customer satisfaction score for Model 3 quality of above 93% -- Tesla's highest rating for any product ever.
Yet Model 3 production and deliveries are about to rise much higher, according to Tesla management. The company said it expects to achieve a weekly production rate for Model 3 of 5,000 units per week in about three months, "laying the groundwork for Q3 to have the long-sought ideal combination of high volume, good gross margin and strong positive operating cash flow," management explained.
Even more, after Tesla hits its 5,000 units per week milestone, management intends to begin adding enough capacity to get to a production rate of 10,000 Model 3s per week, setting Tesla up to deliver over 500,000 Model 3s annually.
GM may have been first to market with a sub-$40,000 all-electric vehicle sporting over 200 miles of driving range, but Tesla looks poised to solidify its position as the first company to bring to market a similarly priced, high-volume all-electric car.