Tesla CEO Elon Musk says Model 3 production bottlenecks are being caused by the battery module assembly line at the company's Gigafactory in Nevada.

Musk said during the company's fourth-quarter earnings call on Wednesday that Tesla became "too confident" in its ability to make batteries, which contributed to its current production problems.

But Musk said that the company is still on target to produce 2,500 Model 3 vehicles by the end of Q1 and 5,000 units per week by the end of Q2.



Tesla CEO Elon Musk said Model 3 production problems are a result of the company being a little too confident in its ability to make batteries.

“It’s ironic since battery modules should be the thing we are best at,” Musk said during the company’s fourth-quarter earnings call. “We were a little overconfident, got too comfortable with our ability to do battery modules.”

The company has struggled to build its first mass-market car, the Model 3, because of bottlenecks in battery module production.

Tesla built a new assembly line at the Gigafactory to make its Model 3 batteries. But the company ran into problems with the new production line.

“Two of the zones that were subcontracted to other companies flat-out didn't work. We were promised they would work and they just didn't work,” Musk said during the call.

The bottleneck has caused major delays in Tesla Model 3 production targets.

Tesla originally said it planned to build 5,000 of the cars 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 in 2018. And in January, Tesla revised its projections yet again, stating that it now intends to hit 5,000 per week by mid-year.

Despite the production hiccups, the company still aims to make some 1 million cars per year by 2o20, Musk said on Wednesday. Considering the company made just over 100,000 vehicles in 2017, it still has a long way to go.