Tesla Model 3 misses forecast

Tesla Inc. struggled to produce its cheapest model shortly after the car debuted, setting back Chief Executive Officer Elon Musk’s mission to reach mainstream consumers.

The automaker built only 260 Model 3s during the quarter ended in September, less than a fifth of its 1,500-unit forecast. Output of the sedan that starts at $35,000 — roughly half the cost of the least expensive Model S — was lower than expected because of unspecified “bottlenecks.”

“Although the vast majority of manufacturing subsystems at both our California car plant and our Nevada Gigafactory are able to operate at high rate, a handful have taken longer to activate than expected,” the company said.

Musk has engendered enthusiasm about the future of electric cars and has automakers including Volkswagen AG, General Motors Co. and Daimler AG lining up to compete. But what Tesla hasn’t done is prove itself as a mass manufacturer. The slow start for Model 3, which was designed for easier assembly, reignites concern that the company will struggle to reach the lofty production targets set by its CEO.

“I would be surprised if anyone was surprised that they came up short,” said Sam Korus, an analyst at Ark Investment Management in New York, which holds Tesla shares. “When Musk gives a prediction, you know it’s an extraordinarily ambitious goal.”

Tesla shares rose $6.61 or 1.94 percent to close at $348.14 Tuesday. The stock has climbed 56 percent this year.