Tesla has reached target and rolled out 7,000 cars in one week
Tesla Motors has reached their ambitious meeting goal of 5,000 Model 3s manufactured in one week and surpassing them to build 7,000 cars in all. Their goal all along was to produce 5,000 Model 3 cars per week before the close of the second quarter. They have certainly demonstrated their ability to mass produce the battery-powered vehicles to cover demand.
Tesla beat their self-imposed deadline by 2,000 cars, the final car rolling off the assembly line on Sunday morning, several hours after the midnight goal set by Musk. This could not come at a better time for Tesla as they have been losing money hand-over-fist burning through cash to produce the Model 3, and along with delays in production, have also potentially compromised Tesla's first-to-market position for a mid-priced, long-range battery electric car.
Tesla Model 3 production has been plagued by a number of issues, including problems with an over-reliance on automation on its assembly lines, battery issues and other bottlenecks.
The company regularly engages in what they call "burst builds,". These burst builds are temporary periods of fast-as-possible production so they can estimate how many cars they can build over longer periods of time. With regard to this kind of build strategy, Brian Johnson who is an Analyst at Barclays warned investors in March to be wary of brief "burst rates" of Model 3 production as they were not sustainable.
Tesla claim though, that they can produce 6,000 Model 3 cars a week from next month with Musk saying, “I think we just became a real car company,”
Investors are watching closely to see whether the company can keep up its end-of-quarter production speed and increase efficiency to produce the cars at a profit so they will have too prove to investors that it can sustain and increase its production.
Since the launch in March 2016, the Model 3 has generated thousands of reservations from consumers in an unprecedented show of support for the new vehicle. Back in May, Tesla said that despite the delivery delays, its Model 3 reservations exceeded 450,000 at the end of the first quarter.
Despite touting the Model 3 as a $35,000 vehicle, Tesla has yet to begin building that basic version and instead is currently building a higher-priced version. It is not clear how many of the orders are for the more premium version.
Justin Kavanagh is a recognised leader in automotive intelligence and vehicle data supply to the entire motor industry. He has almost 20 years experience in building systems from the ground up. As the Managing Director of Vehicle Management System, he understands the need and importance of trustworthy and reliable vehicle history and advice to both the trade and the public.
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