Back in January, Tesla had projected that it would make 2,500 Model 3s per week by the end of the first quarter. This week, however, they are reporting delivery totals to their investors, and they are falling short on these numbers. According to Elon Musk, the company is only hitting about 2,000 Model 3s per week. What’s interesting is that Musk sent an email out to the company outlining these numbers at 3:01 am this morning. I say interesting because no one likes to get emails at that time. In the email, Musk said that it has been “extremely difficult” to pass the 2,000 vehicles per week rate for the Model 3, “but we are finally here”. He goes on to say, “if things go as planned today, we will comfortably exceed that number over a seven day period!”
This seems to suggest that Tesla rapidly exceeded production of the Model 3 over the past week. Bloomberg has been tracking production totals for the car are saying that Tesla has only been hitting about 1,200 per week. So where is this all coming from? Last week, Tesla’s stock took a huge hit following a fatal crash involving a Model X car. The car was part of the vehicle’s semiautonomous Autopilot system, and now federal investigators are looking into just what happened. So is this why Tesla is trying to ramp up its production? Or is this the reason they’re not able to meet those targets?
I can’t decide if Musk’s 3 am email is the sign of a busy man or the sign of a worried man. I know a lot of people who don’t sleep and they use that time to work. But sometimes I wonder if the reason they can’t sleep is that they’re worried about being able to keep it all together. Musk’s email is filled with a lot of exclamation points like – “this is already double the pace of 2017!”. Maybe it is, but saying you can get to 2,500 a week might have been excessive. Especially since this target has been delayed twice, and it isn’t projected to be hit until the summertime. Musk had also said that Tesla could make 500,000 vehicles in 2018, but given the missteps with the Model 3, this might be an impossible target to hit.
Musk does make a good point though. It took five years to reach the 2000/week production rate for the S and the X combined. But it only took 9 months to achieve the same output with the Model 3. Which is why I don’t think we should count Musk down and out in terms of production. He is in an interesting spot though. The Tesla Board recently approved a huge pay increase, which would net him more than $50 billion. But it is contingent upon him increasing the automaker’s valuation to $650 billion.
The big question is whether or not he will be able to do it? This is a lot of pressure and given some of the other things happening with Tesla right now, I don’t think I’m being too critical by saying that it might not be achievable. That’s not to say that I don’t want it to come true. I do pull for people and companies to be successful (where warranted). I just hope that Musk is able to pull this one off.