Tesla is pausing work on the Model 3 sedan yet again as it addresses kinks in its assembly line that are contributing to what CEO Elon Musk has called ‘production hell’.
The electric car maker said late Monday that it’s temporarily halting production for four or five days ‘to improve automation’.
It marks the second time this year that Tesla has hit pause on production of the Model 3.
Tesla announced on Monday that it’s temporarily halting production of the Model 3 sedan as it addresses kinks in its assembly line. It’s the second time Tesla has paused work on the car
Tesla investors have grown increasingly concerned about the company’s consistent failure to keep its promises on vehicle output.
Shares of Tesla fell as much as 2% in pre-market trading on Tuesday and are down 6.9% so far this year.
Model 3, the most affordable sedan from Tesla, is seen as crucial to the company’s future profitability, but has so far missed several production goals.
The car maker said the halt – the second since February – was to improve automation and systematically address bottlenecks to increase production, a regular move by car companies.
‘Our Model 3 production plan includes periods of planned downtime in both Fremont and Gigafactory 1,’ a Tesla spokesperson told TechCrunch.
‘These periods are used to improve automation and systematically address bottlenecks in order to increase production rates’
‘This is not unusual and is in fact common in production ramps like this’, they added.
Billionaire Elon Musk (pictured) has said he’s sleeping on Tesla’s factory floor amid ‘production hell’ of the firm’s highly-anticipated Model 3 electric car.
Tesla investors have grown increasingly concerned about the company’s failure to keep its promises on vehicle output. Earlier this month, Tesla said it made just under 9,800 Model 3s between January and March, which is only a fraction of Musk’s goal of 20,000 a month
The announcement comes in stark contrast to recent comments made by Musk, in which he said he felt ‘optimistic’ about Tesla’s production on the Model 3.
He added that he predicts a major ramp up of Model 3 production soon.
While production is suspended, employees were told to take vacation days or stay home without pay, according to BuzzFeed, which first reported the announcement.
‘While temporary suspensions to production, in order to improve manufacturing engineering/line rates, are not uncommon in the auto industry, particularly during a ramp-up, we believe that the news will once more be taken negatively by the market; providing more honey to the bears,’ Evercore ISI analysts said.
Tesla’s use of robots to assemble Model 3s had led to more complexity and delays, which billionaire Chief Executive Elon Musk acknowledged on Friday in a tweet.
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
‘Excessive automation at Tesla was a mistake. To be precise, my mistake. Humans are underrated,’ Musk explained.
According to Bernstein analysts, Tesla has not only automated stamping, painting and welding like most other manufacturers, but also tried to automate final assembly.
This is where the U.S. electric car maker seems to be facing problems.
‘Tesla’s been trying to run full tilt,” said Chaim Siegel, an analyst at Elazar Advisors.
‘He’s (Musk is) sleeping overnight on the production floor.’
‘I don’t think there is any way they’d purposely want to slow production. It tells me something’s not quite right,’ Siegel added.
Model 3 production fell short of the weekly target of 2,500 at the end of the first quarter.
A number of Wall Street analysts say they do not believe Tesla will succeed in producing 5,000 Model 3s per week in the second quarter, as Musk has promised.
‘I can’t imagine that Tesla can reach an output of 5,000 cars per week until the end of June,’ said Frank Schwope, an analyst with NORD/LB.
‘I expect that Tesla is going to fail (in) their aims for this year, as they did so often.’
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.