Tesla is making over 2000 Model 3s a week, as crucial deadline approaches

Tesla has increased its production of its mass-market electric Model 3 to over 2,000 units per week, according to an email from Elon Musk obtained by several media outlets. It’s an impressive ramp up of production, but it still falls short of Musk’s goal of 2,500 Model 3s per week by the end of the first quarter of 2018.

The news about Model 3 production comes at a crucial time for the automaker, which has seen its steepest monthly drop in stocks in seven years amid questions about the company’s financial future. Last week, Tesla made news back-to-back, first with its biggest vehicle recall yet, and later when it acknowledged that a fatal crash involving a Model X in California occurred while its semi-autonomous Autopilot system was engaged. But through it all, Musk has maintained a defiant, and sometimes dismissive, attitude toward Tesla’s many critics.

In the companywide email (which was obtained by Jalopnik, Electrek, and Autonocast host Ed Niedermeyer), Musk sounds a celebratory note on the 2,000-vehicle per week benchmark, while ignoring the larger issue of missed deadlines.

“It has been extremely difficult to pass the 2000 cars per week rate for Model 3, but we are finally there. If things go as planned today, we will comfortably exceed that number over a seven-day period!”
Moreover, the whole Tesla production system is now on a firm foundation for that output, which means we should be able to exceed a combined Model S, X, and 3 production rate of 4000 vehicles per week and climbing rapidly. This is already double the pace of 2017! By the end of this year, I believe we will be producing vehicles at least four times faster than last year.

EXCLUSIVE: emails from a source inside Tesla show Musk and Tesla management rallying the troops and trying to accelerate sales as sentiment on the company turns negative. pic.twitter.com/u55MnJ8jsP
— Problem Magnet (@Tweetermeyer) April 2, 2018

The email comes a few days after an internal memo went out at the company calling for volunteers to join the effort to ramp up production of the Model 3 to prove wrong the company’s “haters.” Tesla is expected to report its official production numbers to investors sometime this week. A Tesla spokesperson declined to comment.

Last January, Tesla reported making 2,425 Model 3s in the last quarter of 2017, and said it had made “major progress” in addressing bottlenecks in its production line. But the company also pushed back its 2,500-a-week target to the end of the first quarter of 2018, and its 5,000-per-week goal deeper into the year.

“As we continue to focus on quality and efficiency rather than simply pushing for the highest possible volume in the shortest period of time, we expect to have a slightly more gradual ramp through Q1, likely ending the quarter at a weekly rate of about 2,500 Model 3 vehicles,” Tesla said. “We intend to achieve the 5,000 per week milestone by the end of Q2.”

While Musk is sure to brush aside any doubt about the missed target during the next earnings call, it was hard to shake the perception that Tesla is teetering. Last week, the company announced that it was voluntarily recalling 123,000 Model S vehicles over a faulty power steering issue. A day later, Tesla made the unusual move of publicly stating that Autopilot was engaged during a recent fatal Model X crash in Mountain View, California. The National Traffic Safety Board, which is investigating the crash, said in a statement that it was “unhappy” with Tesla’s decision to release the information.

Tension was high among Tesla’s many fans and customers, but the company sought to project an air of nonchalance, Bloomberg’s Dana Hull reports:

Tesla’s Fremont, California, delivery hub was packed with people 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’s struggled to figure out how to mass manufacture cars had implored workers to get production on track and disprove their doubters.

Late Sunday, Musk teased “important news,” only to tweet out an April Fools’ Day joke about Tesla going bankrupt. Meanwhile, Tesla’s stock dropped 4.65 percent to $253.75 as of 12:53PM ET in New York. The shares fell 22 percent in March, the steepest monthly drop since December 2010, the year the company went public.

But some analysts remained bullish on Tesla. “When it rains, it pours,” wrote Instinet’s Romit Shah. “The Model X accident is a complicated and unfortunate situation but in our view a very low probability event that should not diminish the important work that Tesla and other companies developing autonomous systems are doing to improve road safety.”

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