Tesla in big push to boost Model 3 output as usually bullish backers
With pressure escalating after one of the worst weeks in its almost 15-year-history, Tesla raced to manufacture and deliver its mission-critical Model 3 to burnish the numbers it’s about to report to rattled investors.
Tesla’s Fremont, California delivery hub was packed with people on Saturday evening as the last hours of the quarter drew to a close. Red couches and tall white tables were set up outside, a DJ played music and a truck selling Vietnamese food was on hand. Behind the scenes, a company that has struggled to figure out how to mass manufacture cars had implored workers to get production on track and prove their doubters wrong.
The sceptics are getting louder after the past few days. The electric car maker led by Elon Musk has come under regulatory scrutiny for the second crash this year involving Tesla’s driver-assistance system Autopilot, the latest of which resulted in a fatality. Moody’s Investors Service downgraded the company’s credit rating further into junk, citing the combination of production problems and mounting obligations that could necessitate a more than $2 billion capital raising soon to avoid running out of cash.
“Tesla is testing our patience,” Gene Munster, a managing partner at venture capital firm Loup Ventures, who has been bullish on the car maker, wrote in a report after the company announced on Thursday it would have to repair a power-steering issue with the Model S. “When we heard the recall news tonight we asked ourselves, do we still believe in the story?”
Mr Musk risked coming off as tone deaf to investor concerns, sending a series of April Fool’s Day tweets to joke that Tesla had gone bankrupt. The chief executive first unveiled the Model 3 on March 31, 2016, and Tesla’s manufacturing woes have kept hundreds of thousands of consumers who placed $1,000 deposits for the sedan waiting.
From the looks of social media posts by customers who took delivery of their Model 3 over the holiday weekend, Tesla still maintains an army of true believers who are staying put in line for their car. “Two years ago to the day, I put down a deposit on a car I’d never even seen before,” Amanda Bell, a software developer in Nashville, wrote on Saturday on Twitter. “Today, I picked up my dream car.”
Since starting Model 3 deliveries last July, Tesla has pushed back production goals several
times, citing issues with battery output and automating assembly lines. The company forecast in January that it was likely to end the first quarter making about 2,500 cars a week.
Bloomberg is tracking the Model 3 rollout with an experimental tool that estimates production using vehicle identification numbers. The tracker estimates Tesla is building about 1,190 Model 3s a week as of Sunday.