Tesla's improved Model 3 results keep Elon Musk's balls in the air

06 April, 2018, 02:03 | Author: Patty Aguilar
  • Elon Musk speaks on stage during the Westworld Featured Session during SXSW at Austin Convention Center

The electric automaker said it manufactured 2,020 Model 3 vehicles in the last week of its first quarter, falling short of its 2,500 vehicle goal.

The company also responded to concerns about the Model 3's quality.

On Sunday, April 1, in what many would call bad taste, Elon Musk tweeted an April Fool's joke, as Tesla's stock plummets and light is shed on the recent Model X driver's death that came while using the company's "Autopilot" feature.

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".

Elon Musk is sleeping on the factory floor of Tesla's Gigafactory in Nevada, hoping to ensure Tesla hits its benchmark of 5,000 Model 3s per week by the end of June.

The electric-car maker missed its production targets in the first-quarter.


Tesla has not been cash-positive for its 10 year history (with the exception of 2013 when a hoard of government incentive credits pulled it briefly cash-positive), so it has been relying on a series of share and debt issues to keep going. In a research note Tuesday, analysts at JPMorgan recommended selling Tesla stock on the earnings upswing, viewing the pop on production progress as a ideal time to lock in profits and get out. Following the release of its results for the quarter, its shares surged 7% in premarket hours, and later eased up 5% around $267 in midday trading.

Despite all the production hell and cash flow concerns in the first quarter, Tesla has announced plans to build a new truck and a roadster sports vehicle, and to build a factory in China.

Competition isn't far behind, with Jaguar's i-Pace launching in early March at the high end, and the Model 3 facing the Chevrolet Bolt (launched last year), and a large number of similar long-range alternatives (including the Nissan LEAF 230-mile range version, Hyundai Kona EV, Kia Niro EV and Audi eTron) in 2018.

Yet there is a silver lining to Tesla's production rate miss.

These numbers are crucial for the automaker as cash reserves have been said to only be enough to last through the year and so cash flow is king for Tesla. He agreed that Tesla needed eng & prod better aligned, so we don't design cars that are insane hard to build. Tesla shares opened up as much as 6.9 percent and gained 2.2 percent to $258.11 as of 9:47 a.m., regaining some ground after a 22 percent slump in March.

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