Tesla Achieves Q2 Production Goal for Model 3

03 July, 2018, 10:00 | Author: Brooke Harris
  • Tesla’s Model 3

Tesla stock initially jumped, then retreated Monday after the maker of electric vehicles said it hit the target for Model 3 production that Chief Executive Elon Musk said was critical for the company to reach profitability.

These moves turned out to be critical for Tesla. The company even built a massive tent structure outside its main assembly line, building a supplementary line completely from salvaged parts, Musk said.

Tesla met the target by running around the clock and pulling workers from other projects, workers said.

Despite touting the Model 3 as a $35,000 vehicle, Tesla has yet to begin building that basic version and instead is now building a higher-priced version. Musk has repeatedly said the company would not have to raise cash this year.

Tesla has been under pressure to increase production to show it can operate profitably and at the kind of scale needed to be considered a major auto company.

"We did it!", Musk wrote in the email to employees.

"We either found a way or, by will and inventiveness, created entirely new solutions that were thought impossible", he continued.

With the new production levels, Tesla has lowered the estimated wait time for a new Model 3.

While production hiccups have led to tumultuous periods for the shares, they're now up 10 percent this year, and the company is valued at $58.2 billion.

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

"They've been throwing Model 3s ahead of the S to get painted to try to assure that they make their goal of 5,000", the worker said. As of writing, Tesla stock (NASDAQ:TSLA) is trading up 5.30% at $361.16 per share.

"They did everything they can to artificially pump up the third quarter", Sullivan said. Tesla looks to be trying to get out ahead of any speculation around quality of the latest batch, specifically those produced on the GA4 "tent" line.

Mr Tusk enthusiastic announcement prompted a tongue-in-cheek response from Steven Armstrong, chairman and chief executive for Europe, the Middle East and Africa at Ford, the 115 year-old U.S. motor giant.

Bloomberg reports that Tesla reached its target by early Sunday.

Tesla had a hard time ramping up production of the Model 3, its long-awaited entry-level model.

Tesla has been trying to hit a 5,000 per week production target of its Model 3 cars for months after facing production obstacles. Though Tesla has plans for a factory in Shanghai, it's unclear when it will open.

Tesla reaffirmed its guide for positive GAAP net income and cash flow in Q3 and Q4, which is in line with our estimates, but we believe much more optimistic than many investors continue to assume.

In June, Tesla announced it would lay off 9 percent of its workforce and close solar installation facilities in order to cut costs.

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