Tesla Achieves Q2 Production Goal for Model 3

Ann Santiago
July 3, 2018

In April, CEO Elon Musk took direct control over Model 3 production after numerous delays in meeting the company's self-imposed goal of producing 5,000 Model 3 vehicles a week.

Last week was special for Elon Musk and his electric auto company Tesla. Tesla has delivered 28,386 Model 3 cars to date.

"We did it!" Musk wrote in an email to the company, as reported on the website Electrek, which follows Tesla closely.

Today, Spak is out with a new research note on Tesla shares after the electric giant announced that it had produced 5,031 Model 3 electric cars in the last seven days of the second quarter, beating its 5,000/week target.

David Kudla, founder and chief executive of Mainstay Capital Management in Grand Blanc, Michigan, said Monday's news did not change his recommendation to short Tesla stock. Fortunately, production of the Model 3 is expected to ramp up in the near future.

Asked about the potential S and X impact, Tesla said it also produced 1,913 of those vehicles during the last week of the quarter along with its Model 3s.

Tesla, he said, delayed delivery of numerous Model 3s that it made in the second-quarter to boost revenue and achieve the third-quarter profit that Musk promised.

That same report also said Tesla will occasionally pull its machines off the production line and crank them beyond manufacturer specifications, just to see how fast they can run.

Still, Tesla's manufacturing pause is coming after a frenetic three months that involved building a makeshift production line under a tent outside its California assembly plant. What's more, one motor will also act as a back-up for the other, so if one fails, you'll still be able to get to your destination.

With the 5,000/week threshold now in the books, and with Tesla now claiming that a production rate of 6,000 Model 3 units per week will be hit later this month, Tesla investors certainly have much to cheer about. Wall Street analysts polled by Bloomberg have an average price target of $US314 for the stock, which is now trading near $US359 a share.

Because of the focus on the Model 3, the S line is about 800 cars behind, the worker said. Tesla stated GA4 was responsible for 20% of the Model 3s in the last week suggesting a rate of ~1k/week for the tent and ~4k/week for GA3.

Despite working overtime, during now-mandatory weekend shifts, workers told Reuters they were pulled from other departments, disrupting production of the Model S and X lines. Musk doubled down on profitability in the company's Q1 2018 earnings call, when he stated that it was "high time" for Tesla to become profitable.

Tesla had a big quarter for Model 3 deliveries, but it will be nothing compared to the next quarter since Tesla had over 10,000 Model 3's in transit to customers at the end of the quarter.

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