Should Tesla Supporters Be Worried That Some Model 3s Were Assembled in a Tent?
But the electric car maker is still thinking about how to increase the production of Model 3.
Elon Musk, CEO, boasted on Sunday that Tesla and
The focus is on producing at least 5,000 models 3 in the last week of the second quarter.
But in order to achieve this goal, Tesla has been making a \"quick\" transformation of its Model 3 production line, including doing some work in a huge temporary tent as a third assembly line, according to the New York Times.
In order to achieve the economies of scale needed and avoid raising extra capital, Tesla must increase production significantly.
Investors initially cheered on Tesla\'s news of reaching a milestone, with shares up 6% on Monday morning, but over time several analysts questioned whether production was sustainable and eventually the share price fell.
Efraim Levy of CFRA, an analyst, even downgraded the stock rating from holding to selling.
Tesla ended the next day. 3% to $335. 07.
Sam Abuelsamid of automotive research company navant said he was skeptical about inferring too much from Tesla\'s milestones.
\"Before we know how many cars are also starting, any statement about how many cars have been completed in the last seven days makes no sense,\" said Abuelsamid . \".
\"If they deploy employees from other regions and add final parts to some finished cars that started in the previous weeks, completing 5,000 does not mean a 5,000/week build rate.
Jeremy achevedo, Edmunds analyst, has a similar view.
\"Of all the versions that Tesla has released, it\'s becoming more and more obvious that 5,000 vehicles per week are very different from 20,000 vehicles per month.
\"It does show the capabilities of the plant, but it doesn\'t seem like they can sustain it,\" said Acevedo . \".
According to a report by the Wall Street Journal, Tesla has spent $80 million to $90 million on building automation tools.
But, as Musk suggested at the shareholders\' meeting in June, the results of the automation system were mixed, and even meant a less efficient assembly line.
\"One of the biggest mistakes we make is trying to automate things that a person is very easy to do but robots are very difficult to do,\" Musk said . \".
\"It looks super stupid when you see it.
You\'re like, wow!
Why are we doing this?
\"This has led to a continuous shift in production strategy, which analysts believe is unprecedented for automakers.
\"Each other manufacturer tests the production equipment at the supplier\'s factory before shipment, and then usually takes months to run small batches of cars before shipment
Production started before the car was approved for delivery, \"said saidelsamid, noting that\" in Tesla\'s case, they were clearly very eager to book revenue and deliver on Elon\'s promise, so that they completely skipped this stage of Model 3.
\"At the same time, should thousands of Tesla enthusiasts waiting for the Model 3 to go public think twice and drive a car assembled in a tent?
Given recent reports on quality and safety issues, it may be reasonable for Model 3 buyers to give their building a series at a time
Acevedo says that when they get them in the end, they will be over-done.
\"I think Tesla has been under a magnifying glass on quality issues.
So when you have a highly publicized new face for production vehicles, it\'s perfectly reasonable for those who line up to buy Model 3 to check their new car more closely, \"Acevedo said.
In addition, Tesla\'s mainstream customers target their first large-scale sales
Abuelsamid pointed out that the patience of market building for hasty quality or warranty repairs may be much less.
\"Mainstream customers will not tolerate parts that Toyota, GM or Ford dealers can buy the next day waiting for a few weeks,\" said Abuelsamid . \".
According to Abuelsamid, it is possible that Tesla will be taxed to have to carry out large-scale warranty repairs to more and more vehicles, he noted that in 2017, tesla booked $1,000 a year for each of their cars, but spent $2,000.
\"Increasing production without addressing costs will soon put them out of business as these are problems that cannot be solved by excessive repairsthe-
\"Aerial software updates,\" said Abuelsamid . \".