Tesla just slashed in half its Model 3 production target for the first quarter (TSLA)

tesla model 3

Tesla

• Tesla is cutting in half its Model 3 production target for the first quarter of 2018.

• Tesla says it will build 2,500 Model 3 vehicles per week by the end of Q1 2018, and hit 5,000 per week by the end of Q2.

• CEO Elon Musk originally said it could build 20,000 Model 3 vehicles per month by December 2017, but it fell far short of that target.

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Tesla's Model 3 problems aren't over yet. 

CEO Elon Musk originally said the company would make 20,000 Model 3 vehicles per month by December 2017, but the company only delivered 1,550 in the entire fourth quarter of 2017. 

What's more, the electric carmaker said it is pushing back its production target for the Model 3 yet again.

Tesla now says that it will hit 2,500 Model 3 vehicles per week by the end of the first quarter and will build 5,000 per week by the end of the second quarter. 

"As we continue to focus on quality and efficiency rather than simply pushing for the highest possible volume in the shortest period of time, we expect to have a slightly more gradual ramp through Q1, likely ending the quarter at a weekly rate of about 2,500 Model 3 vehicles. We intend to achieve the 5,000 per week milestone by the end of Q2," the company said in its fourth-quarter delivery statement. 

Tesla originally said it planned to build 5,000 per week in December, but in November the company changed the timeline and said it would hit that number by the end of the first quarter. And on Wednesday Tesla revised its projections yet again, stating that it now intends to hit 5,000 per week by mid-2018. 

It's no secret the company is struggling to build the Model 3. CEO Elon Musk said he expected "production hell" for the vehicle when he launched it in July. Then, in October, the company revealed it had only built 260 Model 3 vehicles in the third quarter when it had originally planned to hit 1,500 in September alone. 

The company in November blamed the delays on what it called a production bottleneck at the Gigafactory where the car's battery cells are made. And Musk said he was even camping out at the factory working day and night to try and resolve the issue. 

On Wednesday, though, Tesla said in its statement that production improved near the end of the quarter. 

"In the last seven working days of the quarter, we made 793 Model 3s, and in the last few days, we hit a production rate on each of our manufacturing lines that extrapolates to over 1,000 Model 3s per week," the company said. 

"As a result of the significant growth in our production rate, we made as many Model 3s since December 9th as we did in the more than four months of Model 3 production up to that point."

Despite the company's progress, though, it's still cutting its production target for the Model 3 in half for the first quarter of 2018. 

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