Economy

Reaching Model 3 production target doesn't solve Tesla's problems

Reaching Model 3 production target doesn't solve Tesla's problems

Tesla has delivered a total of 28,386 Model 3 vehicles since its splashy event in July 2017 when CEO Elon Musk handed out the first vehicles to employees. However, while the numbers are good, some of the methods Tesla has used to get them - including production "tents" - aren't exactly conventional, and they don't seem sustainable, either.

Musk had prioritized the weekly production of 5,000 Model 3s.

Tesla confirmed the contents of the email.

By late next month, Model 3 production is expected to increase to 6,000 units per week. Tesla may be onto a victor with the AWD Model 3, but as issues with the original vehicle continue, whether or not it can build this electric auto in sufficient volumes to sat demand is another matter. Musk also has hired hundreds of workers to replace robots who turned out to be inefficient at certain tasks, such as guiding bolts through holes as part of the rear brakes. This could denote that the pickup will be less of a luxury product and more of a genuine work vehicle, and we hope it will be priced accordingly.

Tesla's shares sank 1% on Monday amid the news about the production milestone, giving short sellers some modest relief. The last one was June 30, and according to Musk, it has been kept.

As such, Spak reiterates a Sector Perform rating on Tesla stock, with a price target of $280, which represents a potential downside of almost 20% from where the stock is now trading. But the credit will be reduced to $3,750 in the first half of 2019; $1,875 in the second half of 2019; and then expire at year's end. The company had failed to meet any of its production and delivery targets for the Model 3 up until now.

Despite working overtime, during now-mandatory weekend shifts, workers told Reuters they were pulled from other departments, disrupting production of the Model S and X lines.

Model S and Model X deliveries, meanwhile, are still on track for Tesla's earlier prediction of 100,000 cars in 2018 overall, the automaker says.

Musk promised "game-changing" features when he tweeted about the pickup in December, and last week, he seemed to cop to one such exclusive: onboard power for 240V tools and accessories. The electric automaker also faced scrutiny for the large tents it had set up near its Fremont plant that housed some of the Model 3's assembly line components.

When first unveiled in March 2016, the Model 3 generated thousands of reservations from consumers in an unprecedented show of support for the new vehicle. DragTimes beat the 5.1 figure a few times, too, so the Model 3 is clearly faster than stated. Its market capitalization rivals General Motors and beats Ford.


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