Tesla seems to be in never-ending “production hell.” But this week, CEO Elon Musk told employees in a letter that the company was getting back on track, despite falling short of its most recent target of producing 2,500 Model 3 per week by the end of March.
“It has been extremely difficult to pass the 2,000 cars per week rate for Model 3, but we are finally there,” he wrote in an email sent early Monday (April 2), obtained by Electrek. “If things go as planned today, we will comfortably exceed that number over a seven-day period!” That would be a significant jump from the approximately 1,200 Model 3s per week that Tesla was producing in late March while dealing with assembly line automation problems. Tesla had not replied to inquiries as of publication time.
The company may finally be moving past its painfully slow ramp up, where it has consistently fallen behind targets, leading to stock declines and credit downgrades. In his email, Musk claimed the company is now on “on a firm foundation” to exceed production of 4,000 vehicles per week (including all models). “It took five years to reach the 2,000/week production rate for [Models] S and X combined, but only nine months to achieve that output with Model 3,” he wrote. “Mind-blowing progress!”
Whether that’s enough to calm a nervous Wall Street is unclear. Tesla stock has fallen more than 15% since last week, due to the sluggish Model 3 numbers, and assembly line problems, especially production constraints in battery-module assemblies at its Gigafactory 1 outside Reno, Nevada. To highlight the urgency, Musk reportedly personally took the lead of Model 3 production (paywall) taking over from senior vice president of engineering, Doug Field.
Tesla’s financial survival is riding on the $35,000 (base price) Model 3, its first mass-market vehicle, which will require higher production runs for financial success. The company remains well behind its original target of 5,000 Model 3s per week by the end of 2017.