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Tesla Exec (In Employee Email): Daily Model 3 Production Well Into The 200s

A recently revealed internal email, from Tesla Senior Vice President of Engineering Doug Fields to employees at the company, featured the comment that daily production rates were now “well into the 200’s on every single line.” That is, the Model S, Model X, and Model 3 production lines were all now churning out well over 200 units a day, each. (No, the Model Y isn’t making the cut yet.)

A recently revealed internal email, from Tesla Senior Vice President of Engineering Doug Fields to employees at the company, featured the comment that daily production rates were now “well into the 200’s on every single line.” That is, the Model S, Model X, and Model 3 production lines were all now churning out well over 200 units a day, each. (No, the Model Y isn’t making the cut yet.) The email was reportedly sent on March 23.

The email from Fields also notes that getting Model 3 production rates up to 2,500 units a week by the end of the financial quarter was an important goal because: “There are an incredible number of people who ‘short’ Tesla stock, which means they profit when we fail. And lately the story is the same: ‘Tesla can’t do high-volume production.’ I find that personally insulting, and you should too. Let’s make them regret ever betting against us.”

That’s an interesting way to respond to the shorting.

The email also stated that the company needs to “quickly break through the 300 cars/day barrier, and keep going.”

As the email was an employee email (a leaked one), it perhaps shouldn’t be too surprising that a spokesperson for Tesla declined to comment when queried by various news agencies.

As a reminder here, Tesla will be revealing next week whether or not it has met its goal of producing 2,500 Model 3 sedans a week by the end of the quarter, so the email discussed above makes sense as an effort to boost production rates before the end of that important deadline.

Reuters provides some context: “Doubts that Tesla could meet its production targets and concerns about cash reserves were behind Moody’s downgrade of Tesla last week. The ratings agency cited the likelihood of a new capital raise, which it estimated at over $2 billion, in part to cover approximately $1.2 billion in convertible bonds coming due by March 2019. …

“Tesla shares are still above the $255.73 level, the price when Tesla last announced a capital raise in March last year to raise $1.15 billion. Moody’s and other analysts have predicted Tesla will soon have to sell more shares to replenish cash reserves and pay for expansion of Model 3 production and new vehicles such as the Tesla Semi electric commercial truck and a compact sport utility vehicle.”

I’ll note here that much of that paragraph is speculation — it’s an open question what the firm’s actual situation is as regards funding needs for further expansion. Analysts are for the most part guessing blindly on that count, especially this late in a quarter.)

Going on: “As of December 31, Tesla had $3.4 billion in cash and securities. Moody’s estimated approximately $500 million in cash was needed for normal operations and forecast cash burn this year of about $2 billion. Beyond the $2 billion that Moody’s predicted Tesla would seek in the near-term, it said the company would likely need to raise additional capital during the second half of 2019.”

As a reminder, Tesla is currently targeting a Model 3 production rate of 5,000 units a week by the end of Quarter 2 2018, and a Model 3 production rate of 10,000 units a week sometime before the end of the year.

On a related note, Tesla’s stock price has already partly (but not completely) recovered following a slight drop after a bonds downgrade from Moody’s, and possibly also as the result of a much publicized Model X accident and fatality in California (whereby the lack of repairs on an off-ramp seem to have made the accident far worse than it would have been otherwise). But it is still considerably down compared to one week ago or one month ago.

 
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Written By

James Ayre's background is predominantly in geopolitics and history, but he has an obsessive interest in pretty much everything. After an early life spent in the Imperial Free City of Dortmund, James followed the river Ruhr to Cofbuokheim, where he attended the University of Astnide. And where he also briefly considered entering the coal mining business. He currently writes for a living, on a broad variety of subjects, ranging from science, to politics, to military history, to renewable energy.

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