Tesla CEO adds shifts to boost Model 3 production
Tesla Inc. will begin around-the-clock production at its Fremont 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 percent in after-hours trading.
“As part of the drive toward (6,000), 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-aweek 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 3,000 to 4,000 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 also outlined cost-saving measures in his email.
Tesla’s Fremont factory lines have been running on two shifts. Musk’s email doesn’t elaborate on the specifics of how a third will be added to the production schedule.
About 10,000 people work at what is the lone auto assembly plant on the West Coast, and that number will be growing. Between Fremont and its battery factory near Reno, Tesla will be adding about 400 people per week for several weeks, Musk wrote.
Tesla produced 9,766 Model 3s in the first quarter and missed a goal to build 2,500 of the sedans in the last week of March. Musk touched on why he was setting a higher target internally than the one the company has communicated publicly in his email.
“The reason that the burst-build target rate is 6,000 and not 5,000 per week in June is that we cannot have a number with no margin for error across thousands of internally and externally produced parts and processes,” he said, noting that the carmaker produced 2,250 of the sedans last week.
In a development that could be a boon for Tesla, China said it would remove the 50 percent foreign-ownership limit on Chinese automotive businesses.
China has long required carmakers to link up with a local partner before building a factory in China. Though it will be effective in five years for conventional car companies, Beijing will eliminate the limit this year for manufacturers of electric cars.
Tesla has identified a site in Shanghai for a factory, but has not wanted a partner for fear of losing control of its technology.