Tesla gave customers and investors both good and bad news on Tuesday.
Elon Musk’s electric car company gave a fresh update on the ongoing ‘production hell’ of its Model 3 mass-market car.
The firm increased production of the Model 3 in the first quarter but still fell far short of the numbers it promised last summer.
s
Tesla increased production of the Model 3 (pictured) in the first quarter, but still fell far short of the numbers promised by CEO and billionaire tech mogul Elon Musk last summer
Tesla said it made just under 9,800 Model 3s between January and March.
That’s four times what it made in the fourth quarter, but still only a fraction of the 20,000 per month that Musk pledged to make when the firm first introduced the car.
In late March, the firm experienced a sharp rise in Model 3 production.
‘In the past seven days, Tesla produced 2,020 Model 3 vehicles,’ Tesla said in a filing.
‘In the next seven days, we expect to produce 2,000 Model S and X vehicles and 2,000 Model 3 vehicles’.
The news pushed Tesla’s stock up more than 3.7% on Tuesday morning, marking a reprieve from when shares closed at a new low last week.
Shares of Tesla have fallen nearly 15% since the start of the year on a string of bad news.
In total, Tesla produced 35,000 vehicles in the quarter, including Models S and X, which is a 40% increase from the previous quarter.
Tesla expects Model 3 production will climb rapidly through the second quarter and reach about 5,000 vehicles per week around early June.
The firm added that high sales volume, good gross profit margins and strong cash flow should stave off any need to raise extra cash.
Tesla said it made just under 9,800 Model 3s between January and March, which is four times what it made in the fourth quarter, but still only a fraction of the 20,000 per month that Musk pledged to make when the firm first introduced the car.
In a statement, Tesla also said that the quality of Model 3 production is ‘at the highest level we have seen across all our products’.
Elon Musk’s (pictured) electric car company is hoping the affordable Model 3 sedan will help the firm gain access to a bigger share of the mainstream consumer market
‘This is reflected in the overwhelming delight experienced by our customers with their Model 3’s,’ the firm added.
Model 3 reservations were ‘stable’ in the first quarter, according to the firm, while any customer cancellations were due to ‘delays in production in general and delays in availability of certain planned options’.
Still, Tesla has continued to hit snag after snag in achieving its goal of mass-producing the Model 3 sedan.
The $35,000 (£24,878) Model 3 is the car that’s most important to Tesla’s future.
It’s the company’s first lower-cost, high-volume car is crucial to its goal of becoming a profitable, mainstream automaker.
Tesla at one point had more than 500,000 potential buyers on the waiting list for the Model 3.
Earlier this month, CNBC reported that Tesla’s Model 3 production setbacks may have been a result of the firm churning out a high rate of ‘flawed parts.’
In a surprising bit of good news, Tesla expects Model 3 production will climb rapidly through the second quarter and reach about 5,000 vehicles per week around early June
However, Tesla said it doubled the weekly production rate of the Model 3 last quarter by addressing production and parts supply bottlenecks.
The firm also suspended production from Feb. 20-24 for planned work to adjust equipment in order to improve automation and increase production rates.
Tesla has experienced a string of bad news during the past year, in addition to the Model 3 production delays.
Federal investigators are currently investigating a fatal Model S crash in California, which killed a man near Mountain View.
And late last month, Moody’s Investor Service downgraded Tesla’s corporate debt further into junk status.
Meanwhile, Elon Musk’s other company, SpaceX, has crossed a number of historic successes off its list, including the launch of the Falcon Heavy in February, which is considered the world’s most powerful rocket.
DOES ELON MUSK SLEEP AT TESLA’S CAR FACTORIES?
Billionaire Elon Musk has said he sleeping on Tesla’s factory floor amid ‘production hell’ of the firm’s highly-anticipated Model 3 electric car.
Production of the £25,000 ($35,000) vehicle, hailed as Tesla’s first lower-cost, high-volume car, has been marred by delays as the firm has struggled to keep up with pre-order demands.
In a tweet, CEO Musk said he is now sleeping at the company’s factory, adding that the car business ‘is hell’.
Elon Musk (pictured) claims that he’s now sleeping on the floor of a Tesla factory as the electric car firm works to overcome what he’s called Model 3 ‘production hell’
In his tweet, Musk claimed he had not wrestled oversight of Model 3 production from Tesla Vice President of Engineering Doug Field, adding that changes to the company’s hierarchy were an attempt to ‘divide and conquer’.
Musk wrote: ‘My job as CEO is to focus on what’s most critical, which is currently Model 3 production.
Although the eco-friendly car is one of Tesla’s more affordable models, those looking to buy the vehicle may be waiting months before they can get behind the wheel.
Tesla had struggled to meet the impressive demand for its vehicle, with a reported 500,000 pre-orders put in so far.