Tesla’s struggles to manufacture and deliver its affordable electric sedan look like they’re ongoing, but CEO Elon Musk says he’s “feeling very good about the production for the Tesla Model 3.”
The company’s earnings report Wednesday showed that Tesla is inching closer to its production goals for the Model 3 car, but it still fell behind for the first part of the year.
The way Musk spins it, during some peak hours, the company is already producing what would amount to 5,000 cars per week at a potential sustained rate. But that’s Musk getting ahead of himself.
Even if Tesla didn’t hit the target of 2,500 cars per week this quarter, the Bay Area-based car maker was up to 2,270 Model 3 vehicles per week in April.
Musk took over factory production last month and has lofty goals for the next two months. In a shareholder letter the company laid out plans to reach 5,000 cars per week.
“Our understanding of production is improving,” he said before sharing an example of a robot that was automating a process that could’ve been done by hand or entirely eliminated. The example led him to lots of chuckling about the absurdity of it all.
He added that the company’s had “radical improvement in production” as seen with the battery pack production time picking up from 7 hours to under 70 minutes.
The company’s losses grew this past quarter to $784.6 widening from last year’s $397.2 million loss. But the quarter’s car-based revenue brought in more than it did last year at $2.5 billion.
In the call, Musk talked about a company reorganization this month and focused on removing third-party contractors. He didn’t bring up any workplace violation allegations leveled at the company from factory workers. “It has really gotten out of control,” he said about the employment structure. He likened the contractors to barnacles. “There’s going to be a lot of barnacle removal.”
Beyond the 9,766 Model 3s produced in the first quarter, Tesla made a combined 24,728 Model S and X vehicles, its luxury sedan and SUV.
As Musk summed up on the call, Tesla needs to become profitable and really focus on the Model 3. Anxious drivers are waiting.