In a letter to shareholders, Musk said it has been difficult to get accurate forecasts for the car, a more affordable model for the automaker known for expensive vehicles.
"What we can say with confidence is that we are taking many actions to systematically address bottlenecks... and these actions should result in our production rate significantly increasing during the rest of Q1 and through Q2."
Tesla reported a record loss for the quarter of $675 million on revenues of USD 3.3 billion.
But Tesla shares rose 1.7 per cent in after-hours trade, on the upbeat assessment of production efforts.
In the quarter, Tesla delivered 29,967 vehicles including 1,542 Model 3 vehicles.
The Model 3, priced starting at USD 35,000, is key to Tesla's effort to becoming a mass producer and reshaping the automotive market. Its other cars sell for around twice that price.
On Tuesday, Musk's other major company SpaceX launched a Tesla Roadster into space aboard a Falcon Heavy rocket.
At Tesla, Musk has announced plans for an electric semi- truck, boosted production of batteries for its electric cars and for other uses and has expanded its network of charging stations.
It is also planning an autonomous coast-to-coast drive to "showcase a major leap forward for our self-driving technology," according to Musk.
The California-based company last month announced an unusual executive compensation plan that would enable Musk to be paid only if Tesla hits certain milestones.
Compensation for Musk, 46, will be based on a new 10-year performance stock award that could give him billions worth of company shares, or nothing at all if the company fails to meet its targets.
(This story has not been edited by Business Standard staff and is auto-generated from a syndicated feed.)