Tesla has finally reached its production milestones for the Model 3
Readers of our Finance section know that we cover Tesla (NASDAQ:TSLA) a lot around here. They may be an auto manufacturing company, but they actually resemble more of a technology company than anything. Everything from the tech inside its vehicles to the assembly and supply lines themselves utilize bleeding-edge tech.
We just covered Tesla's curious tent, dubbed the "Alien Dreadnought" by some, late last week. The purpose of this structure? To help propel Tesla to 5,000+ Model 3 units per week.
For those that haven't been paying attention, Tesla hasn't ever turned a profit in its 8 years as a publicly traded company, and for that matter, in its 15 years as a company since it was founded in 2003.
The at-times polarizing Tesla CEO, Elon Musk, has been talking up the figure of "5,000 Model 3s made per week" for months now, reaching back to 2017. It's this production milestone that will enable the company to finally become profitable as it reaches an economy of scale that allows it to finally get in the black. At least, according to Elon.
Tesla: Officially reached 5,000 Model 3s produced in a single week
That bring's us to today's news. Tesla has delivered on its stated goal of 5,000 Model 3's a week (while maintaining Model X and S production numbers). Electrek broke the news earlier yesterday.
Elon Musk sent an email to all employees congratulating them on reaching a record 7,000 Tesla cars produced in a single week. 5,000 or more of those were Model 3s, a compact mainstream sedan retailing in the 40-grand space, and the remaining 2,000 or so were Model S sedans and Model X SUVs. A clip from the Elon email here:
We did it! What an incredible job by an amazing team. Couldn’t be more proud to work with you. It is an honor.
The level of dedication and creativity was mind-blowing. We either found a way or, by will and inventiveness, created entirely new solutions that were thought impossible....
Not only did we factory gate 5000 Model 3’s, but we also achieved the S & X production target for a combined 7000 vehicle week!
The real question is.. is this a burst production level or is this the new normal? Tesla will need to sustain 5,000 or more Model 3s per week for about.. two years, all at 52 weeks a year if it is to satiate current demand for Model 3s. That's only counting preorders which are rumored to be anywhere from 500k to a million.
There are still questions surrounding fire code and building permits for the massive tent outside the main factory floor and if this building was indeed integral to production milestones then it becomes absolutely critical that it is able to continue standing and operating.
Dave Sullivan is a product analysis at the research firm AutoPacific Inc.and he isn't impressed. He said,"Reaching it is one thing. Consistently producing 5,000 per week with outstanding quality is another. I don't think producing 5,000 once is anything to get excited about until it's repeatable."
Investors are extremely interested in this as shown by how Tesla stock has performed today. Pre-market saw prices way up almost 5%, or $18 dollars. Despite the good news prices then plummeted over $20 and as of this writing, TSLA is down by almost 3% compared to Friday's close.
It's not certain what exactly has shaken investors but it seems that Musk will periodically release overly positive news, spinning it as best he can while he simultaneously acts as if he is unconcerned by how his company's stock is doing.