Tesla sales climb as Model 3 stokes demand in pricier offerings

Tesla Inc.’s vehicle deliveries rose in the third quarter as orders for its more expensive models perked up following Chief Executive Officer Elon Musk’s introduction of the cheaper Model 3 sedan.

The automaker shipped 26,150 cars and SUVs in the period, including a record number of Model S sedans and Model X sport utility vehicles. Tesla said it expects to exceed by several thousand units its forecast in July for a faster pace of deliveries in the second half of the year from the 47,100 shipped in the first six months of the year.

Tesla’s sales were comprised of 14,065 Model S sedans, 11,865 Model X SUVs and 220 of the new Model 3. Initial deliveries have primarily been to employees.

Production totaled 25,336 vehicles in the three months ended in September, 260 units of which were Model 3. The third quarter was the first to include early output of the car that starts at $35,000 before any incentives or options. The company forecast in August that it would make 1,500 Model 3 cars in the period.

“Model 3 production was less than anticipated due to production bottlenecks,” the company said in a statement. “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 Palo, Alto, California-based maker of electric cars and energy-storage devices turned over the first 30 Model 3 cars to employees at a late-night event at the company’s Fremont, California, auto plant in late July. On Twitter, Musk said that production would grow exponentially and vowed to make roughly 100 of the cars in August and more than 1,500 in September, building to 20,000 cars per month in December.