Tesla has met its Model 3 production goals

03 July, 2018, 00:50 | Author: Lora Ball
  • Tesla’s Model S

CEO Elon Musk sent an e-mail to company employees Sunday praising them for producing 5,000 Model 3s, a compact auto that's created to shift Tesla from a niche manufacturer to a mainstream automaker.

In a very tangible sense, Tesla views its production line as a laboratory for untested techniques.

What Musk still needs to prove is that this level of output can endure. However, Tesla was forced to build a makeshift tent containing a production line comprised of spare parts in order to reach this goal. "We expect that GA3 alone can reach a production rate of 5,000 Model 3s per week soon", the automaker said today, "but GA4 helped to get us there faster and will also help to exceed that rate".

It's also a relief for customers who have waited for their cars for more than two years.

Moody's Investor Service downgraded Tesla's debt into junk territory back in March, warning that Tesla won't have cash to cover $3.7 billion for normal operations, capital expenses and debt that comes due early next year.

Musk set a new goal of building 6,000 Model 3s a week, perhaps by the end of August.

"We did it!" Musk proclaimed in the email to employees Sunday.

"Intense in tents [This refers to a third Model 3 production line that was reportedly being built outside of the factory, under a massive tent.] Transporting entire production lines across the world in massive cargo planes". But for years, the key question for Tesla was could it deliver consumers a more affordable EV for the masses.

Shares surged more than 5% when news of the production milestone crossed, before sinking into the red.

That is a sentiment shared by Dave Sullivan, manager of product analysis at market research firm AutoPacific Inc.

More news: Korean players thought Germany win was enough to go through

Not impressed was Steven Armstrong, Ford Motor Co's CEO for Europe, the Middle East and Africa.

"I think we just became a real auto company", he wrote in conclusion.

The 5,000th auto of the week rolled off the production line on Sunday morning, according to Reuters. Consumer Reports pointed out flaws with the Model 3's brakes.

Money-losing Tesla has been burning through cash to produce the Model 3, and delays have also potentially compromised Tesla's first-to-market position for a mid-priced, long-range battery electric auto as a host of competitors prepare to launch rival vehicles. Augmented with GA4, the Model 3's newest assembly line set up in the massive sprung structure on the grounds of the Fremont factory, however, Tesla noted that it was able to hit its production target for the compact electric auto faster.

In April, the Center for Investigative Reporting detailed concerns about Tesla's Fremont factory conditions and underreported workplace injuries.

The company produced just 2,425 in the fourth quarter.

TipRanks indicates Wall Street is evenly split between a battle of bulls vs. bears on this electro auto giant giant. Will the company give any update on its quest for profitability and its cash condition? Tesla nonetheless achieved an all-time production record by making a total of 7,000 cars in seven days. Will Tesla indicate what net reservations now are?

Overall, Q2 2018 production came to 53,339 vehicles.

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

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