Tesla finally reaches Elon Musk’s Model 3 production goal

3 Jul 2018654 Views

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Silver Tesla Model 3 in showroom. Image: Eakrat/Shutterstock

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After an arduous few months, Elon Musk’s production goal for the Tesla Model 3 has been hit.

Tesla has reached the production target for its Model 3 vehicle, according to a regulatory filing published on Monday (2 July). The firm said Model 3 production exceeded the combined production of both the Model S and X vehicles.

In total, 53,339 vehicles were built in Q2, a 55pc increase from the previous quarter.

At the official launch of the Model 3 last year, CEO Elon Musk said that Tesla would build half a million cars in 2018, a fivefold increase from 2017. Musk had promised investors that Tesla would make 5,000 Model 3s per week.

Production issues

What followed was a litany of teething problems, from influential magazine Consumer Reports failing to give the Model 3 the seal of approval, to generally slow production rates for the vehicle.

The Model 3 is pegged as the company’s first mass-market car and in April of this year, Tesla said it hit a production run high of 2,270 Model 3 vehicles per week.

The company this week said: “The last 12 months were some of the most difficult in Tesla’s history, and we are incredibly proud of the whole Tesla team. It was not easy, but it was definitely worth it.”

Setting its sights even higher

The company already plans to up the production ante, intending to increase production to 6,000 Model 3s per week by late August. It also confirmed that it expects to be profitable in the third and fourth quarters of this year.

It is currently heavily in debt and has only reported two profitable quarters in eight years of public trading. The goal now is to build enough Model 3s for sales revenue to tip the scales towards the black, as the running costs of the factory are quite high.

“The problem is that Tesla appears to be good at ‘burst’ rates but it needs to attain consistency, which will come, but my forecast is that they will sell just over 100,000 Model 3s this year in the US,” analyst Alan Baum told Forbes.

As the company announced the target news, it emerged that senior vehicle engineer Doug Field left last week, following a leave of absence in May. Field was poached from Apple, where he most recently worked as the vice-president of Mac hardware engineering. He also worked for both Segway and Ford.

Silver Tesla Model 3 in showroom. Image: Eakrat/Shutterstock

Ellen Tannam is a writer covering all manner of business and tech subjects

editorial@siliconrepublic.com