Tesla hits pause button on Model 3

Cornelia Mascio
Aprile 17, 2018

Tesla has temporarily halted production of the new Model 3 to improve automation.

The shutdown is taking place a week after chief executive officer Elon Musk gave CBS This Morning a tour of Tesla's assembly plant in Fremont, California, and said the company should be able to sustain producing 2,000 Model 3 sedans a week. During the same quarter in the prior year, the firm earned ($0.69) EPS. sell-side analysts expect that Tesla, Inc. will post -15.15 earnings per share for the current year. Jennison Associates LLC now owns 3,382,553 shares of the electric vehicle producer's stock worth $1,053,158,000 after purchasing an additional 494,761 shares during the last quarter. Well now Tesla has stopped production of the Model 3 for four to five days as it seeks to "improve automation" on the production line. Tesla did not respond to questions about the June schedule or mandatory overtime.

News of the halt in production was first reported by BuzzFeed.

Tesla's trials in putting the Model 3 into mass production have drawn scrutiny from investors. The company has been counting on a quick increase in sales to bolster revenue and enable the company to pare down losses and pay off bonds and borrowings while still investing heavily in future vehicles.

Meanwhile, reserving a new Model 3 now has a delivery wait time of "12 to 18 months", according to Tesla's website.

Its financial troubles have been compounded by an investigation by federal safety experts into a fatal crash March 23 that involved a Tesla Model X SUV that was operating with its Autopilot driver-assistance system engaged. Tensions between Tesla and the agency increased after the automaker suggested the driver was at fault because data from the auto showed that he did not have his hands on the steering wheel for several seconds before the vehicle hit a concrete barrier.

And given the fact that Musk did not specify an actual number, but only said Tesla was making over 2,000 Model 3 cars every week, it does not provide any more clarity. But it has proved more hard than he expected to get the machinery to work in harmony.

He later commented again about the issue on twitter saying "Yes, excessive automation at Tesla was a mistake". To be precise, my mistake. Today, Tesla shares closed at $291.21, down 3 percent on the day.

Tesla stock and bond prices have slumped in recent weeks. They have lost almost a fifth of their value since March 12.

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