Good News For Tesla Fans: Model 3 Production Problems Appear Solved

Matt Posky
by Matt Posky

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.

Matt Posky
Matt Posky

A staunch consumer advocate tracking industry trends and regulation. Before joining TTAC, Matt spent a decade working for marketing and research firms based in NYC. Clients included several of the world’s largest automakers, global tire brands, and aftermarket part suppliers. Dissatisfied with the corporate world and resentful of having to wear suits everyday, he pivoted to writing about cars. Since then, that man has become an ardent supporter of the right-to-repair movement, been interviewed on the auto industry by national radio broadcasts, driven more rental cars than anyone ever should, participated in amateur rallying events, and received the requisite minimum training as sanctioned by the SCCA. Handy with a wrench, Matt grew up surrounded by Detroit auto workers and managed to get a pizza delivery job before he was legally eligible. He later found himself driving box trucks through Manhattan, guaranteeing future sympathy for actual truckers. He continues to conduct research pertaining to the automotive sector as an independent contractor and has since moved back to his native Michigan, closer to where the cars are born. A contrarian, Matt claims to prefer understeer — stating that front and all-wheel drive vehicles cater best to his driving style.

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  • Steve Biro Frankly, while I can do without Eyesight and automatic start-stop, there is generally less B-S with Subarus in terms of design, utility and off-road chops than with many other brands. I just hope that when they adopt Toyota’s hybrid system, they’ll also use Toyota’s eCVT.
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  • ToolGuy Not sure if I've ever said this, or if you were listening:• Learn to drive, people.Also, learn which vehicles to take home with you and which ones to walk away from. You are an adult now, think for yourself. (Those ads are lying to you. Your friendly neighborhood automotive dealer, also lying to you. Politicians? Lying to you. Oh yeah, learn how to vote lol.)Addendum for the weak-minded who think I am advocating some 'driver training' program: Learning is not something you do in school once for all time. Learning how to drive is not something that someone does for you. It is a continuous process driven by YOU. Learn how to learn how to drive, and learn to drive. Keep on learning how to drive. (You -- over there -- especially you, you kind of suck at driving. LOL.)Example: Do you know where your tires are? When you are 4 hours into a 6 hour interstate journey and change lanes, do you run over the raised center line retroreflective bumpers, or do you steer between them?