Tesla stops Model 3 production temporarily amid financial concerns

Tesla stops Model 3 production temporarily amid financial concerns

Tesla stops Model 3 production temporarily amid financial concerns

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 company's CEO Elon Musk has acknowledged that excessive automation is partly to be blamed for the production bottlenecks.

Tesla took shortcuts with testing of its production line in order to get to the market more quickly, which some experts say have resulted in early manufacturing problems, the Guardian reported.

The shutdown of the assembly line was meant to improve automation and systematically address bottlenecks to increase production, a normal move by vehicle companies, Tesla said on Monday.

In a letter to employees, CEO Elon Musk said that by producing 6,000 electric cars per week, the company would be able to reach its goal of 5,000 cars per week while allowing for a margin of error. "This means that we will be adding another shift to general assembly, body and paint".

The email reveals that Musk's new aggressive target involves operating the company's factory in Fremont, California, 24 hours a day the entire week.

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To hit that target, Tesla is adding an extra shift at the factory.

"Starting today at Giga and tomorrow at Fremont, we will be stopping for three to five days to do a comprehensive set of upgrades".

Musk believes that constant production will ensure 6,000 of its first mass-market vehicles are made each week by the end of June, the email obtained by technology blog Electrek showed Tuesday. But Autopacific analyst Dave Sullivan says manufacturing doesn't normally stop for days, especially nine months after production began. In essence, the company may run the assembly line for a longer period of time and with more workers on the line each week, but it might still be dealing with the same problems that have plagued Model 3 production for the past nine months, opting for a costlier route to achieve a production target.

Tesla's fortunes ride on boosting Model 3 output.

Musk, who has said his automaker will be profitable and cash-flow positive in the third and fourth quarters and won't need another capital raise this year, also outlined cost-saving measures in his email.

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