The US e-car pioneer increased production of its Model 3 mass-market car in the first quarter but still fell far short of its output targets. CEO Elon Musk also quashed speculation he might need to raise more capital.
Tesla announced on Tuesday that it had delivered 8,180 Model 3 sedans from January through March, with 2,020 of the mass market e-cars produced in the last seven days of March alone.
The figures for both weekly and monthly production were still far below the company's goals, which Tesla chief executive Elon Musk promised would reach 5,000 and 20,000 respectively. Despite the shortfall, Musk promised a speedy acceleration in the next three months.
"We were able to double the weekly Model 3 production rate during the quarter by rapidly addressing production and supply chain bottlenecks, including several short factory shutdowns to upgrade equipment," he said in a statement.
In all, the Palo Alto, California-based company delivered 29,980 cars in the first three months of the year — up 20 percent — and made up of 11,730 Model S, 10,070 Model X and 8,180 Model 3.
Crucial Model 3 ramp-up
Production bottlenecks have plagued the company, with much of its future banked on the Model 3, its first mid-price, mass-market vehicle.
Heading into the final week of the quarter, a Tesla executive urged line workers at the company's sole auto-assembly plant in Fremont, California, to safely ramp up Model 3 output to more than 300 a day and "prove a bunch of haters wrong." Musk said on Twitter Monday he was sleeping at the factory and called the car business "hell."
The carmaker halted Model S and Model X production at the very tail of the month because it was ahead of schedule to hit first quarter targets. A small number of those workers were invited to voluntarily help build Model 3 cars instead.
The company now expects the Model 3 production rate will increase through the second quarter and said it would make 5,000 units a week in "about three months."
Quickly ramping up Model 3 production is crucial for the Silicon Valley electric vehicle maker, whose profitability depends on the cheaper sedan. Tesla says it has about 500,000 advance reservations from customers for the car.
The company's reputation has been damaged recently by speculation over its finances and a car crash in California.
US authorities have launched an investigation of a fatal crash involving a Model X that was driving in Tesla's Autopilot mode, and the company was forced to recall every Model S made before April 2016.
Moreover, mounting liquidity pressures and challenges with the Model 3 prompted Moody's Investors Service last week to cut the carmaker's credit rating further into junk status, adding fuel to a selloff of the company's bonds to all-time lows.
Despite the setbacks, Tesla said it won't be required to raise more capital this year, spurring a partial rebound for the electric-car maker's battered shares.
"Tesla does not require an equity or debt raise this year, apart from standard credit lines," the company said.
Analysts from brokerage Evercore ISI said a run-rate of 2,000 per week, while short of the 2,500 target, was better than most on Wall Street had expected and clearly showed progress versus where the company was at the start of the year.
uhe/jd (Reuters, AP, AFP)