Investors, analysts and the whole industry is closely watching developments at Tesla Inc. (TSLA) as the company faces increased scrutiny and distressing performance in recent months.
Tuesday morning brings positive news, as the electric car portal Electrek cites a leaked email sent by the CEO Elon Musk mentioning that the production of Tesla’s iconic Model 3 car will "likely exceed" 500 cars a day. The CEO wrote, specifically: “It is looking quite likely that we will exceed 500 vehicles per day across all Model 3 production zones this week.” (See also: Tesla Will Be Profitable in Second Half of 2018, Says CEO Musk.)
Musk also requested that employees inform him of “any specific bottlenecks” that may hinder the company from hitting the target so that he can take the necessary action to rectify the issue.
Despite an earlier stated target of producing 5,000 Model 3 cars per week, the company was producing a little over 2,000 units per week by mid-April, which led to serious questions on the project's viability. The remarkable progress specified in the email indicates a 75% jump in the production of car units.
Tesla Revised Targets Downward
If the earlier-mentioned target of manufacturing 500 vehicles per day is achieved, it will mean that the EV carmaker will achieve a production target of 3,500 per week, assuming a seven-day production week. Though it will still fall short of the earlier stated target of 5,000 units per week, the progress is significant considering the earlier reports that were warning about weekly production remaining below 2,000 units.
Early in April, a research report by Goldman Sachs Group Inc.’s (GS) research desk issued a sell recommendation on Tesla, saying that the company will be unable to meet its production target for its new Model 3 car. It led to a challenging response from Musk, who responded by tweeting, “Place your bets …,” daring investors to exit the stock. (See also: Elon Musk Challenges Goldman on Negative Report.)
The earlier stated target of 5,000 cars has been deferred to June. The company had initially hoped to hit that target by the end of last year. The company has also fixed the issues around production of the necessary battery packs, an integral part of the Model 3, at its Gigafactory One facility in Nevada. A few issues have been reported at the assembly unit at Tesla’s Fremont, California, location, but Musk is confident that they will be sorted out. (See also: Tesla Sheds More Executives, Holds Hackathon to Fix Bottlenecks.)
Yesterday, Musk and Tesla received support from billionaire investor Ron Baron, who said that he expects 20 times return from Tesla in the long run. Tesla stock was trading at a price of $283 Tuesday afternoon. (See also: '20X Returns' From Tesla: Billionaire Ron Baron.)