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Musk says Tesla Model 3 back on track, production set to grow “four-fold”

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Tesla CEO Elon Musk has reaffirmed that production of the company’s Model 3 electric vehicles is back on track, and says that it is set to increase three- or four-fold by the second quarter of 2018.

A “definitely under stress” Musk made the comments in a rare television interview with CBS News on Friday, during which cameras were allowed onto the factory floor, where the mass-market EVs are being assembled.

During the interview, Musk said that the company had so far been able to maintain its much-scaled back Model 3 production goal of 2,000 cars a week, and was expecting to perhaps triple or quadruple that number again very soon.

“We were able to unlock some of the critical things that were holding us back from reaching 2,000 cars a week. But since then, we’ve continued to do 2,000 cars a week,” he said.

“We’ll probably have, I don’t know, a three or four-fold increase in Model 3 output in the second quarter.”

As we have reported, the “production hell” that has plagued Tesla’s Model 3 roll-out has been a major challenge to Musk and the team at Tesla, as they work to meet orders that are reportedly growing by around 1,800 new reservations a day.

Last August, Musk revealed that the delay in Model 3 production had seen around 63,000 people cancel their pre-orders, taking the order book down from around 518,000 to 455,000.

As he has noted in recent analyst calls, Musk told CBS News that the delays were partly due to complacency “about some of the things that we felt were our core technology” and partly due to problems on the assembly line.

“We had a crazy, complex network of conveyor belts, and it was not working,” he said.

Musk also used the interview to take a swipe at market analysts, some of whom he said were backwards-looking in their views of the company.

“A lot of the analysts, is they kinda look in the rearview mirror instead of looking at the front windscreen,” he said.

“This has very frequently been why people have underestimated Tesla, because they would look at …what Tesla’s done in the past and use that as proxy for what we’re able to do in the future.”

Shares of the company hit a low of $252.48 on April 2, but bounced back up to around $300 after Musk Tweeted – as CNBC put it – a “detailed financial guidance” at 1:11 a.m on Friday, in reply to Tweet from The Economist.

As we reported here late last month, a separate Musk tweet, in response to a question from a UK customer, has suggested the Model 3 will not arrive on Australian shores until earl 2020.  

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  • GlennM

    Well they delivered 8,180 Model 3 in Q1.

    Four times that is 32,720 for 13 weeks in the quarter (2516 / week).

    Should be achievable unless the 2000 per week was a freak, work all day all night week…which it probably was.
    Should they achieve a “regular” 2000 per week in the next Quarter that would be a brilliant achievement and bode well for the future.

    of course 32,720 at say an average of $45k each is about $1.5 billion per quarter that is the more important number….

    Good luck to them…

  • Peter F

    Just to put it in perspective, even if the rate only slowly increases to 4,500 model 3’s by the end of the year, total Tesla production for this year will be more than the entire Australian automotive industry did at its peak

  • palmz

    “Shares of the company hit a low of $252.48 on April 2, but bounced back up to around $300 after Musk Tweeted”

    he’s shares went up by about 20% from a tweet? no wonder why trump tweets so much. cash flow positive in Q4 is a big call, but I would like to think he has a better idea of their books than most people.

    interesting times

    • Wallace

      Because Tesla is now a publicly traded company Musk has to be careful about what he says. If he makes a prediction that is far off the mark then he opens the company up to a lawsuit from disgruntled shareholders.

      Privately held company execs can make all sorts of wild claims with no consequences.

      • palmz

        I was half trying to be funny. 🙂

        but it probably means they need to hit those production targets. But as I said it will be interesting to watch what happens.

  • Carl Raymond S

    And now they’ve announced a 4 to 5 day shutdown to address bottlenecks. Good. The current setup appears to be capped at approx 2000/wk. After the shutdown, the new max per week will be 3000? 4000? 5000?
    5 days is a long shutdown. Musk said he had a plan. I’m optimistic we’ll see a doubling within weeks.