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Tesla built 2000 Model 3's in one week, but missed its target

05 April, 2018, 02:02 | Author: Sara Gill
  • Elon Musk Goes On Twitter Tirade Over Article Noting Model 3 Dumpster Fire

Maybe Musk will finally lead his company out of production hell-and release his wannabe customers from limbo.

"It comes down to the Model 3". Typically, General Motors and Ford spend about 5% to 6% of their sales on capital expenses.

An intimate link had to exist between the vehicle's engineering and its manufacturing. But it's still only a fraction of the 20,000 per month that CEO Elon Musk promised when Tesla first started making the auto.

24,728 of the cars manufactured were Model S and Model X vehicles, down 3,592 from the 28,320 luxury vehicles that Tesla pushed out in Q4 2017.

Tesla shares jumped as much as 6.9 per cent in morning trade, recouping a third of its losses from a week dominated by bad news about its credit rating and a crash involving a vehicle using its semi-autonomous driving technology. But after a sharp plunge in its stock over the past month, investors appear to be taking solace in the latest production figures, Tesla shares surging by more than 3% in late morning trading. In the coming weeks, Tesla will need to prove that it can sustain and build upon the peak weekly production rates it just announced. Production of base Model 3 is not expected to start until the second half of the year.

However the piece of data most investors are actually looking for are the Model 3 specific production numbers.


There's reason for such skepticism.

The company said its delivery count "should be viewed as slightly conservative", as final numbers could vary by up to 0.5%, because a vehicle is only counted as delivered if it is transferred to the customer and all paperwork is correct.

Looking at Tesla's weekly rate is a bit like asking a marathon runner the fastest they can run a mile. The problem that the company now faces is that its fixed-income "story" only work as long as the company's shares were going up.

Tesla is no stranger to rocky production ramp-ups-the Model X had its own troubles-but the Model 3 was supposed to be the company's real moneymaker: a basic, lower-price, mass-produced auto that would put electric vehicles in reach of upper-middle-class families. (He did the same a few years back, helping get production of the Model X SUV up to speed.) "Car biz is hell", Musk said on Twitter (amid a debate with The Information reporter Amir Efrati). That's not the way a CEO typically celebrates a successful quarter.

Another quarter, another disappointment for Tesla Inc. It cited "the progress made thus far" as "laying the groundwork" for a strong third quarter. Tesla reported in February that a new battery production line had been built at its Grohmann Automation labs in Germany and was scheduled to be installed last month.

Not every vehicle that rolls off the assembly line is immediately delivered to a customer. Vehicle biz is hell...

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