Tesla hits gas on Model 3 production
Company adds third shift to get more cars on the road
FREMONT >> Will a third shift be the charm for Tesla as it seeks to get its Model 3 production on track?
That’s the hope according to an email that Tesla Chief Executive Elon Musk has sent to company employees. In the email, a copy of which was obtained by the automotive tech blog Electrek, Musk says Tesla’s Fremont plant is about to add a third shift and go to 24-hour, seven-days-a-week production on the Model 3, with a goal of cranking out 6,000 of the electric cars by the end of June.
“As part of the drive towards 6k, all Model 3 production at Fremont will move to 24/7 operations. This means that we will be adding another shift to general assembly, body and paint,” Musk said in the email. “We are burning the midnight oil to burn the midnight oil.”
Musk said Tesla would shut down production for three to five days in order to complete “a comprehensive set of upgrades” that will put the company on the path toward the 6,000-Model 3-a-week production goal. Musk also added that to meet Tesla’s production target, it will go on a hiring spree and add 400 jobs a week “for several weeks,” for its Model 3 assembly line.
Tesla didn’t return a request for comment from The Bay Area News Group.
A good thing
Gene Munster, director of tech research firm Loup Ventures, said that at first glance word about Tesla shutting down it Model 3 production for a few days could be seen as negative, but “is actually a good thing” as it is necessary to get the assembly line in order to handle the planned increase in car output.
“Tesla has been clear that the ramp in Model 3 production will grow exponentially in a stairstep pattern, not linearly,” Munster said.
It’s a bold gamble for Musk, who has staked much of his and Tesla’s reputations on a successful, widespread rollout of the Model 3. The sedan, which starts at $35,000, is supposed be Tesla’s first so-called moderately priced car.
“(The) Model 3 is critical to Tesla’s growth,” said Tim Bajarin, president of tech consultancy Creative Strategies. “While their higher end models drive profits, the Model 3 with its lower price drives growth. Getting the manufacturing problems of the Model 3 corrected will determine Tesla’s longevity and its ability to remain a top electric vehicle vendor in the future.”
But reports of production delays and issues in the Model 3’s design and build have cast a pall over Tesla in recent weeks. Investors have been skittish about Tesla, too, and the company’s shares have fallen by almost 19 percent, to $292.60 Wednesday after reaching a 2018 high of $360.50 on Jan. 23.
And late Wednesday, California’s Division of Occupational Safety and Health said it was launching a new investigation into reports about worker safety and protection at the company’s facility in Fremont.
Musk’s note ran the gamut of topics and sentiment, and was at times full of praise for Tesla’s workers, philosophical about how the company runs its meetings and savagely critical towards some of Tesla’s contractors and their role in the company’s business operations.
Kudos from boss
Musk began by congratulating Tesla’s workers for completing a thirdstraight week of producing at least 2,000 Model 3 vehicles, which peaked this past week at 2,250 Model 3s in addition to 2000 Tesla Model X and Model S cars coming off the assembly line. By the time he was finished, Musk was effusive with his feelings about Tesla’s employees.
“Thanks for being such a kickass team and accomplishing miracles every day,” Musk said. “It matters.”
In between those laudatory sentiments, Musk said the company needs to do a better job with streamlining Tesla’s own internal business processes. He called excessive meetings “the blight of big companies and always get worse over time,” and that Tesla needs to get rid of frequent meetings unless those are dealing with an urgent matter.
Musk also said spending will get a closer look, and that any expenditures that may rise above $1 million over the next 12 months are on hold “until explicitly approved by me.”
And when it comes to Tesla’s contractors, Musk served notice to those whose performance he said has ranged “from excellent to worse than a drunken sloth,” and that “all contracting companies should consider the coming week to be a final opportunity to demonstrate excellence. Any that fail to meet the Tesla standard of excellence will have their contracts ended on Monday.”
“Tesla has been clear that the ramp in Model 3 production will grow exponentially in a stairstep pattern, not linearly.” — Gene Munster, director of tech research firm Loup Ventures