Tesla shares fall despite hitting Model 3 production target

03 July, 2018, 06:33 | Author: Elaine Woods
  • Tesla’s Model 3

That's a 55% increase from the first quarter, "making it the most productive quarter in Tesla history by far", the company said in the Tesla Model 3 announcement.

Doug Field was relieved by Elon Musk as head of Model 3 production in April and is now taking a break from the company.

The accounts vary slightly: Elon Musk reportedly sent an internal email saying that Tesla hit the target of producing 5,000 Model 3 cars in a week.

One worker told Reuters that, to meet the goal, employees from other departments were dispatched to parts of the Model 3 assembly line to keep it running constantly, and breaks were staggered "so the line didn't stop moving".

Model 3 production tripled to 28,578 in the company's second quarter from the previous quarter, Tesla said.

In an email, Mr Musk praised staff for reaching the much-delayed goal, helped by setting up production in a tent. At the same time, Musk issued a voluntary recall of 123,000 Model S Teslas because of faulty power steering. The boost in productivity has been attributed to GA4, the new Tesla production line which is located in a tent.

However the company still fell short of what Wall Street had expected for total deliveries.

"In the interim, we do not see this production rate as operationally or financially sustainable", said CFRA analyst Efraim Levy.

The Model 3 was first unveiled in 2016 and at the time Tesla said it planed to produce 5,000 Model 3 cars a week in 2017 and 10,000 a week by 2018. Amid a cash crunch, Tesla has focused on Model 3 options with sticker prices above $US65,000, as opposed to the more affordable $US35,000 base model, which it has yet to begin building.

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"The last 12 months were some of the most hard in Tesla's history, and we are incredibly proud of the whole Tesla team for achieving the 5,000 unit Model 3 production rate".

"I think we just became a real vehicle company", Mr Musk wrote. It had to hire more people to work at the factory.

Musk said that Tesla was targeting 6,000 Model 3s a week in the next month.

Tesla more than doubled EV production in Q2 versus Q1, the automaker has confirmed today, with Model 3 cars rolling off the line - including the new tent facility - at a rate of more than 5,000 per week by the end of June 2018.

He continued: "The level of dedication and creativity was mind-blowing".

"This is very positive news for Tesla because the Model 3 takes them from a niche core producer to a mainstream automobile manufacturer", Tigress Financial Partners analyst Ivan Feinseth said.

No standard automotive solution could be built in time, so we created a new solution.

The Model 3 push has been tough for the company.

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