By on August 19, 2018

We’ve got a treat for Tesla advocates today. Despite what seems like an attempt to surpass Volkswagen as the automaker to receive the most negative publicity in a single year, there remains a light in the darkness. Tesla may have finally sorted out its production issues with the Model 3.

Logistical problems had forced the company way behind schedule for most of 2018, making its goal of 5,000 units per week an unclimbable peak. But it finally managed to mount that hill and plant its flag in the final week of June. At the time, we had no idea if this was to be an isolated incident stemming from some divine automotive mercy or proof that Tesla had righted the ship.

While it not it did not experience a trouble-free July, the firm’s Fremont factory appears to be humming along at over 5,000 units per week now. What’s better is that analysts are now saying things are only looking up, estimating even higher output numbers in the months to come. 

According to reports from CNBC from Thursday, the automaker should be able to maintain a steady production stream and could even ramp production up to 8,000 with little impact on its spending.

“Tesla seems well on the way to achieving a steady weekly production rate of 5,000 to 6,000 units per week,” Evercore ISI analyst George Galliers said after an extensive tour of the company’s facilities. “We are incrementally positive on Tesla following our visit. We have confidence in their production. We did not see anything to suggest that Model 3 cannot reach 6,000 units per week, and 7,000 to 8,000 with very little incremental capital expenditure.”

From what we can tell, Tesla is already on the cusp of 6,000 weekly units. While the end of July saw a severe production slowdown — dropping to approximately 2,500 Model 3s at one point — it managed a comeback and hit over 5,900 cars per week on Sunday morning. That represents almost two months of nearly uninterrupted improvement, if you’re willing to believe July was as successful as claimed. Even if you aren’t, August seems to be going well enough with VIN registrations coming up substantially.

Evercore analysts claimed to be impressed with Tesla’s general assembly in and stamping segments in Fremont, California, which “met or exceeded all the benchmarks which [they] had been for.”

“From what we saw, it appeared that Tesla’s Model 3 press is able to run two parts together (both right and left door),” Galliers explained. “While we were unable to determine hits per hour, when we asked an engineer, the response was a confident ‘we’re not telling you that but plenty.’ Stamping seemingly has the capacity and capability to support all Model 3 targets and potentially future vehicle models as well.”

Analysts also didn’t have much to complain about in terms of the tented assembly line that’s responsible for finishing the fanciest examples of the Model 3. In fact, it has been an important factor in bolstering overall output.

As optimistic as all this sounds, it’s a separate issue from the apparent breakdown of Elon Musk. The man clearly needs a vacation and to stay off Twitter for a while. Perhaps now that the Model 3’s assembly issues seem to be squared away, he’ll be able to do that. Meanwhile, Tesla can refocus on quality control, this strange privatization issue, important legal battles, and restoring the sanity of its overworked CEO.

“Focusing on the fundamentals and setting aside talk of privatization, we are incrementally positive on Tesla following our visit,” Evercore said in note on Thursday.

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45 Comments on “Good News For Tesla Fans: Model 3 Production Problems Appear Solved...”


  • avatar
    arthurk45

    This claim has already been contradicted by another observer who spoke with assembly workers- they said they are unable to produce the number required on their line to meet even the 5,000 unit goal. The workers laughed at the claims being made by Elon Musk.

  • avatar
    pdog_phatpat

    Oh, so they fixed their horrible quality issues and design flaws? No more rear bumpers falling off new 50 thousand dollar cars? Party time!

    • 0 avatar
      mcs

      The bumper falling off is ridiculous, but I’d take that over an IMS failure on a $90,000 Porsche.

      • 0 avatar
        brandloyalty

        What are the circumstances of the bumper detachment? Apparently it was being driven through water. Was it deep enough and the speed high enough to just tear the bumper off? The driver did say it “filled with water”, which could mean acting like a scoop. We don’t know.

    • 0 avatar
      FreedMike

      Right, because nothing has ever gone wrong at the back of any $50,000 vehicle not made by Tesla.

      Wait…
      https://www.detroitnews.com/story/business/autos/chrysler/2018/08/02/ram-trucks-recalled-tailgate-problem/37258603/

      I’m sure you now will tell us how FCA deserves to fail.

  • avatar
    CombiCoupe99

    Odd. This article is written as if the author believes these numbers are correct.

  • avatar
    CaddyDaddy

    This goal was reached at exactly 4:20 in the afternoon. With time enough to acid wash the press release. What about the reports of 1,000’s of Teslas parked in a fenced lot behind a distribution center in Tracy, CA. If I wanted a warmed over feel good press release I would read Motor Trend or watch CNN.

    ……let me guess, production is going so smooth, by next qtr. the Tesla truck will be rolling off the Assembly line to meet the backlog of Semi production in the USA at 2,500 / wk.

    Hooey!

    • 0 avatar
      amca

      The backlot full of cars fits with what I report below: I’ve heard of someone getting a Model 3 delivered in two weeks from order, without a reservation.

    • 0 avatar
      SCE to AUX

      You missed the news that the lot is now empty:

      https://insideevs.com/tesla-model-3-staging-sites-empty/

      • 0 avatar
        CaddyDaddy

        SCE – AUX. Nope sorry. Fremont, CA office park with 250 or so Teslas is a far cry from the the 1,000’s that were photographed in the Central Valley. ….and I stand corrected, it was Lathrop, CA not Tracy, CA. (10 mi separation)

        https://electrek.co/2018/07/20/tesla-stocking-model-3-lots-tsla-shorts-freaking-out/

        I doubt they emptied that lot in a month.

  • avatar

    Funny how shortsighted people stuck in 20th century cannot accept the reality that Tesla is not going anywhere and electric vehicles are there to stay and send ICE to scrap yard of history (sooner is better IMO).

    • 0 avatar
      JohnTaurus

      Funny how shortsighted people stuck in LaLa land think that Tesla’s problems are over, and that its somehow going to stop the ICE in its tracks, that the problems associated with BEVs don’t still exist, and ignoring the fact that they still aren’t viable for a large number of people. They also tend to ignore the fact that the “legacy” manufacturers are coming out (and have come out) with BEVs that can be made ready quicker, have better quality, and that can sell along side the ICEs that still pay the bills. The only thing those BEVs lack is the hype and the insanity of the CEO that builds them and the legions that support them.

      • 0 avatar
        jonnyanalog

        No one seems to understand that a moderately sized fleet of, say 400 Tesla trucks, (no place to build them yet either) would literally require it’s own substation in order to keep the fleet fully charged. Talk about a huge capital investment.

    • 0 avatar
      Asdf

      All BEVs ever built are inherently defective, as the problem of fully charging the battery taking an extraordinary amount of time when it shouldn’t reasonably take more than a maximum of five minutes (the equivalent of the time it takes to fill a fuel tank) has not been addressed. Even the brand new Tesla Model 3 suffers from this defect (!) even though it’s brand new. So it’s clear that BEVs are in fact NOT here to stay, but represent an evolutionary dead end. Otherwise, the charging defect surely would have been properly addressed by now, after all this time.

      • 0 avatar
        Master Baiter

        “All BEVs ever built are inherently defective,…”

        I suggest you review the definition of defect. It’s not a defect if it conforms to specifications; I don’t recall Tesla promising five minute recharge time.

        By your logic, all passenger aircraft are defective because they can’t fly Mach 3.

    • 0 avatar
      I_like_stuff

      EV’s make up 1.5% of all new cars sold. Look at it this way..twice as many people bought a stick shift last year (3%) than bought an EV. That should tell you something….

      • 0 avatar
        Luke42

        You’ve got to look at the rates-of-change, though.

        Fewer and fewer manual transmission cars are being made, while more and more EVs are being made.

        Absolute numbers are important, but so are rates-of-change.

        Calculus, people! Calculus!

        Lastly, EVs solve the problem of the mismatch between RPM*torque required of the wheels and the RPM*torque provided by a piston engine in a much more elegant way. Once you take a test drive in an EV, the automatic vs. manual question evaporates. I spent a lot of time mastering the now-archaic art of driving a manual transmission car, but that skill will be completely obsolete soon.

        P.S. I still hope to teach manual shifting to my kids out of a sense of tradition. But is manual worthwhile as an actual daily skill? That ship sailed at least 20 years ago.

    • 0 avatar
      stuki

      At the current rate of improvement in leading edge battery chemistry and cost of manufacture, that will take decades upon decades. ICE pickup MPGs (per EPA at least) have improved as fast as cell phone battery density over the past decade. Electric car improvement have only looked impressive because they started so far behind cell phones. Now that cars are closer to catching up, they’ll be stuck at cellphone improvement rates as well.

      Another issue making extrapolating recent BEV developments into future risky, is that the entire growth of BEVs have come about in an era of the most reckless growth in credit and free money history has ever seen. And virtually all of that money have been channeled to the BEV-hyping classes and geographies. The whole industry has been a free-for-all of capital destruction, and temporary exemption from every conceivable law of economics. Which doesn’t necessarily mean BEVs have no future. But it certainly means they have in no way proven themselves to be viable in the wild yet.

  • avatar
    APaGttH

    So that means they’ll start building the $35,000 version that was promised years ago. Right? RIGHT???

    • 0 avatar
      TwoBelugas

      There will probably be a press release at some point that says some part unique to the 35k version is out of stock so they are forced to make the 59k version.

      But don’t worry, they will extend your 60 month loan to 84 months and you will get free nifty Tesla key chain that retails for 89.99.

    • 0 avatar

      No. Find me $35000 BMW 3 series.

      • 0 avatar
        jonnyanalog

        There are 16 in stock within the DFW area right now according to Car Gurus. What’s your point?
        The Model 3 was promised at the $35k price point and Tesla has yet to deliver on that promise. Try building one right now. Log on to their site and try. That’s right, YOU CAN’T.

  • avatar

    While I understand the issues “swirling” around Tesla, I don’t understand why some seem to want the company to fail. Most of what I know about Tesla I’ve learned here through articles and the comment section. I don’t blindly think Tesla can do no wrong nor do I believe the reverse of that. Matt reported a figure of 5900+ per week for July. Shouldn’t that be welcome news?

    My attitude is still somewhat wait and see while I hope things improve for the company. I’ll never own one of their vehicles, but I would like to see Tesla overcome the issues they face and succeed. Judging from what some have posted here the odds are stacked quite high against that happening. Despite that I remain hopeful. And. . .to be clear I am not against folks expressing their thoughts – negative or positive. Say on!

    • 0 avatar
      JimZ

      “While I understand the issues “swirling” around Tesla, I don’t understand why some seem to want the company to fail.”

      I don’t think anyone actually wants the company to fail. But a little bit of schadenfreude from watching the arrogant fall on their asses doesn’t hurt.

      • 0 avatar
        bunkie

        Perception is a really curious thing. Yours is that no one wants to see the company to fail. I read the comments on Tesla all the time and see a very different picture. Those who loudly complain that the government is taking their money to give to Tesla buyers in the form of the tax rebates, to point out just one often-heard argument, certainly qualifies.

      • 0 avatar
        orick

        People are betting billions that Tesla will fail. So I would say take any comments and opinions with a faint heap of salt.

        • 0 avatar
          JimZ

          assuming you’re talking about those perfidious “shorts,” no, they’re not “betting billions that Tesla will fail.” You can’t make billions shorting the stock of an insolvent company.

          • 0 avatar
            Master Baiter

            “I don’t understand why some seem to want the company to fail.”

            Tesla and EVs in general have become political footballs because:

            1. Climate alarmists who claim we’ll doom the planet if we don’t regulate the ICE out of existence.
            2. Government subsidies.

  • avatar

    So Tesla is on its way to becoming a real car maker.

  • avatar
    bultaco

    There are lots of opinions in many directions on Tesla, but they sell an American car that (some) Americans actually aspire to own. This is an accomplishment (focusing on the product and not the political issues) as there have been approximately zero aspirational American sedans since the 60s. So there’s that. I wish that other American companies could build and sell an everyday car that would turn heads like a Tesla does, even here in Boston where they’re everywhere.

  • avatar
    amca

    A friend recently told me he’d canceled his Model 3 reservation.

    His interest had cooled. And a friend of his had ordered a Model 3 without a reservation and got the car inside of two weeks. My friend said – “if I change my mind, I figure I can get one easily.”

    The bloom is off the rose.

  • avatar
    tylanner

    Ford vs. GM

    Tesla vs. The World

  • avatar
    Richarbl

    Long time reader of TTAC but not so much in recent years, have logged back in to get a more balanced view of Tesla and how the company is positioned in broader terms.
    Sadly I see this site appears to have a greater level of irrational hate than even Jalopnik and I didn’t think that was possible.

    • 0 avatar
      AdamOfAus

      I don’t know about that Richard. I am a refugee from Jalopnik myself, having left a year or two ago. This place has it’s moments, but there is a lot more balance than what you’d get at Jalopnik.

  • avatar
    I_like_stuff

    The EV market is 1.5% of total cars sold. Tesla is the leader of a very, very, very small niche market. And yet for some weird reason 50-70% of auto news is about either this company or its charlatan CEO. It’s very bizarre.

    • 0 avatar
      Luke42

      It’s a growing niche, which potentially includes every cubicle taxi and predictable-route delivery vehicle on the planet.

      I’m a pretty enthusiastic EV hippie, and I concede that ICE vehicles will have a place for a long time to come.

      However, whether gas cars or EVs are the niche vehicle has the potential to flip, and hard. Commercial truck escort vehicles, medical transport companies, and traveling salesmen with unpredictable schedules will likely be driving ICE vehicles for a long time to come.

      Every 9-5 John and Jane who make a twice-yearly trip to see Grandma in another state? Tesla already makes a better car for that, and the only problem is producing them in sufficient numbers to fulfill the backlog. The Tesla Model 3 is already one of the top-10 best-selling cars in the US, and I haven’t even gotten mine yet.

      • 0 avatar
        stuki

        Better than what for Joe and Jane, though? Better than the most popular “car” in America, the F150, for your postulated use case, perhaps.

        But better than an optimized, plug in, hybrid? Dragging all that expensive, heavy battery back and forth to work just for then one trip to grandma, is about as efficient as dragging the F150 back and forth, just to have it available to tow the boat to the lake, for that one annual fishing trip.

        While hybrids, even plug ins, have taken a sales, reputational and hypeutational beating recently, being neither Red Meat ‘Murican like the F150, nor Lucy-in-the-Sky Hippie like BEVs; I’d venture they are still the most balanced solution to the kind of use cases you are describing. And furthermore, they can be easily tweaked and rebalanced for differing needs and environments, and as technology evolves. From heavy electric dependence in areas of plenty charging opportunity, to less so in places, and for people with needs, that emphasizes ICEs strength.

  • avatar
    redapple

    5000 cars / week.
    16 hour/day.

    = 63 jobs per hour.

    That is very high. At the limit.
    I may have # hours and # shifts wrong.

    • 0 avatar
      Tj21

      My facility produces easily 75 quality vehicles an hour, 63 is definitely do-able. It’s the quality and reliability I’d be more concerned with. New manufacturer, new processes, new lines and robots. All the other manufacturers have had decades to figure this out.

      • 0 avatar
        mcs

        I’ve seen 80 on a single line. 63 on multiple lines is nothing.

      • 0 avatar
        JimZ

        an important part of “figuring it out” is knowing what operations you can speed up and knowing how fast you can feasibly run the line. Tesla seems to have approached the Model 3 launch thinking “we’ll build them the same way as the Model S, but just go a lot faster!”

  • avatar
    Carroll Prescott

    It is one thing to build 5k a week in production; are they selling them? I heard there is a lot filled with Model 3’s that aren’t sold (or worse, can’t be sold because of quality issues).

  • avatar
    brandloyalty

    I went to an electric car show the other day. I was surprised at the uneven panel gaps and seams on a Model 3. Particularly the trunk and frunk. I’ve seen this before on an X. It doesn’t mean they are poorly made or unreliable, but it certainly looks bad.

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