Musk doubles down on Model 3 with 24/7 production
Tesla Inc. will begin around-the-clock production at its Fremont, California, assembly plant to boost Model 3 output, chief executive officer Elon Musk told employees.
The electric-car maker will try to build 6,000 of the sedans a week by the end of June, Musk wrote in an email Tuesday first obtained by the blog Electrek. A Tesla spokesman declined to comment. The company’s shares rose as much as 2.7% in after-hours trading. “As part of the drive towards 6k, all Model 3 production at Fremont will move to 24/7 operations,” Musk wrote. “This means that we will be adding another shift to general assembly, body and paint.”
The goal Musk describes in the email is higher than the 5,000-a-week Model 3 target Tesla has set for the end of the second quarter, a potentially positive development that comes with some caveats. The CEO also signaled Tesla is planning another pause in Model 3 output next month after stopping for three to five days this week to make updates to its factories in California and Nevada.
The upgrades Tesla is making while idling the plants this week “should set us up for Model 3 production of 3000 to 4000 per week next month,” he wrote.
Tesla’s fortunes ride on boosting Model 3 output. The company needs revenue from delivering more cars to customers after spending billions of dollars to boost manufacturing capacity. Musk, who has said his automaker will be profitable and cash-flow positive in the third and fourth quarters and won’t need another capital raise this year, also outlined cost-saving measures in his email.
“I have asked the Tesla finance team to comb through every expense worldwide, no matter how small, and cut everything that doesn’t have a strong value justification,” he wrote.
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