Tesla Will Pause Model 3 Production, Stock Extends Losses

Tesla share price continues to tumble down towards its bond price following headlines from Reuters, citing sources, that the car-making company will shutter production of the Model 3 from May 26th to 31st for "fixes to its assembly."

  • TESLA PRODUCTION SHUTTERED FROM MAY 26-MAY 31, REUTERS SAYS
  • TESLA IS SAID TO PAUSE MODEL 3 PRODUCTION FOR FIXES: REUTERS

Reuters notes that two sources confirmed that the next stoppage on the general assembly line at the Fremont, California, plant was scheduled for May 26-31.

The production-challenged electric vehicle maker previously warned of 10 days of temporary shutdowns this quarter as the company addresses manufacturing problems that have delayed volume production of the Model 3 sedan, which is seen as crucial to Tesla’s long-term profitability, Reuters adds.

This follows the previous production halt on April 17th to make "on-the-fly fixes", as well as a prior stoppage in February.  The April shutdown, combined with the upcoming one, would add up to the planned 10 days of stoppages.

Tesla has been struggling to find solutions to manufacturing bottlenecks on the new assembly line that produces the Model 3, a sedan intended for volume production. An over-reliance on robots has complicated that task, Chief Executive Officer Elon Musk has acknowledged.

Musk, Tesla’s billionaire founder, told employees it was “quite likely” the company would reach a rate of 500 Model 3s per day this week, or 3,500 a week, automotive news website Electrek reported on Tuesday, citing an internal email. Musk also told staff to alert him of “any specific bottlenecks” on the production line.

While Musk has said the planned stoppages are intended to give the company time to perform upgrades that will help it reach a goal of building 6,000 vehicles per week by the end of June, the market is becoming increasingly skeptical, especially since in order to meet the production goal of 6,000 cars per week by the end of July, Musk said last month that all Model 3 production would begin working around the clock.

Reuters learned that the teams working on general assembly have already switched to three shifts, a schedule that helps maximize capacity and flexibility; the news wire adds that teams working on the body of the vehicle - where the external shell of the car is assembled - are working in two 12-hour shifts.

Meanwhile, TSLA is extending losses:

Catching down to the bond's weakness...

 

Comments

True Blue pods Tue, 05/15/2018 - 16:53 Permalink

The dollar, or FRN to us, is backed by debt.

Put it more succinctly; it is backed by slavery enforced at gunpoint. The only reason that 'debt' is considered valid is because the US gov't has put up every citizen, alive or as yet unborn as collateral; promising their future earnings -or to kill them should they refuse to pay up.

But of course, it's all for the children (who will be enslaved to debts they did not obligate themselves to and had no say in or benefit from) so that peonage is perfectly okay, legitimate and somehow 'respectable.'

In reply to by pods

pods HominyTwin Tue, 05/15/2018 - 16:00 Permalink

But other "markets" are a-okay right?

I'd take my chances with BTC if I were a trader.

I just cannot understand the purists denouncing BTC/cryptos while watching their SnPee charts.

Everything is corrupted by the Fed's easy joobux.

Hell, you could argue cryptos are (or were as CME and now ICE wants in) actually closer to the free market than the rest of the rigged ones that are talked about.

Gold markets have been rigged for a long time, yet gold is money, always has been, always will. (and yes, I agree that it is)

Why is gold a sound investment or TEOTWAWKI plan and something else that can function outside the current FRN paradigm not?

(and no lester, we don't want you mixing your buzzwords as a reply)

pods

In reply to by HominyTwin

not dead yet lester1 Tue, 05/15/2018 - 22:20 Permalink

Tulip mania and other things like it happened long before central banks were born. No different this time. There's a reason they call Wall Street the other Las Vegas. Tesla stock and bonds have drawn in the momentum investors and the gamers pushing Tesla stock ever higher. Huge short interest works to the advantage of the gamers playing both sides. You think Wall Street is suddenly in love with bitcoin because they think it's for real? Just like Tesla they see an opportunity to make money off the suckers, I mean true believers, not that they believe in the product.

Moron who wrote the article like other scribblers hasn't a clue that Musk was an early investor and did not found Tesla. Just as he is given credit for creating PayPal which he didn't. What Musk has done is brought the cult to Tesla which undeservedly rewarded investors and ensured Tesla has plenty of suckers to pony up cash for his failing operation. It's that charisma and getting credit for things others accomplished that has created the cult and flying stock which is why the board keeps Musk around. Musk goes the stock is toast the next day. If Musk stays the cult will last for a little longer but unless there is some miracle, like a huge management change for the better and huge cash infusion, the companies toast.

Tesla is failing because of Musk. He was made CEO for his huge investment in the company and his ability to con people with his charisma and fake resume. As a CEO he is incompetent at running a business. He doesn't have a clue. As the finest car builder out there Bob Lutz, and others, have said get Musk out of there and get someone in who knows how to build cars. Thus they have problems with Model 3 production due to Musk's incompetence in not learning from other auto companies mistakes and setting unrealistic goals and skipping proven methods. So what does Mr corporate welfare do? He shoves aside the production manager and slides into that role making things even worse. Plus whenever an exec leaves and we see his bio very few of them have any car building experience before joining Tesla. Tesla seems to like techies for their management and don't want anyone who used to get their hands dirty making real cars. Musk and his minions spend way too much time and resources trying to build some pie in the sky life changing empire instead of making Tesla a viable business.

In reply to by lester1

not dead yet konputa Tue, 05/15/2018 - 22:32 Permalink

After being in an accident many of these lithium batteries combust a few days later. Even Tesla's competitors. What we are going to see in the future is governments are going to require all lithium cars having an accident, except for very minor fender benders, to either immediately remove the battery or quarantine the whole car for a set period. Not good for sales of electrics but necessary.

In reply to by konputa

Bertie Wooster Tue, 05/15/2018 - 14:53 Permalink

Yet another sad attempt at a shrill headline.

ZeroHelp must be struggling for readers these days, we predicted this would happen thanks to their politically-motivated one-sided views.

shizzledizzle Tue, 05/15/2018 - 15:00 Permalink

Hugely overvalued company halts their most marketable (affordable to the masses) product and is down less than %5.  Let that sink in for a minute. All the hype gets priced in and all the reality gets ignored.