Tesla: More Stores, Broken Bolts, & A Big Model 3 Production Push

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The number one thing on the mind of Tesla fans heading into this weekend is whether the company can make good on its promise to ramp up production of its Model 3 midsize sedan to 2,500 per week before midnight on Saturday — the moment when the first quarter of 2018 will officially be over. While the company is rallying its troops to reach the goal, it is facing a massive recall of its Model S sedans to replace broken power steering bolts and pushing for approval of a bill in the New York legislature that would allow it to open up to 20 more stores in the Empire State.

Proving The Haters Are Wrong

Tesla factoryTesla stock is being rocked lately by an aggressive round of short selling — a technique that bets a stock will go down rather than up. The company’s bond rating has been lowered, meaning it will cost the company more to raise money in the future. As of the end of trading on Thursday, the stock was down over $100 per share from its all time high. A headline in the New York Times this morning reads, “Tesla Looked Like the Future. Now Some Ask if It Has One.”

If Tesla misses its target of building 2,500 cars a week by midnight on Saturday, the voices of the doom and gloom crowd will build to a crescendo. With all that angst as a backdrop, Bloomberg reports Doug Field, Tesla’s senior vice president in charge of engineering, sent an email to its employees on March 23 exhorting them to help the company meet its goal. Reacting to the wave of short selling, he wrote, “I find that personally insulting, and you should too. Let’s make them regret ever betting against us. You will prove a bunch of haters wrong.”

While no one really knows what goes on inside the Fremont factory, Bloomberg suggests some employees working on the Model S and Model X assembly lines are being given permission to volunteer their services to the Model 3 production process. If Tesla misses its goal, it won’t be for lack of trying.

Broken Bolts

Tesla Model S power steering bolts
Credit: TMC member Brass Guy

A story surfaced on the Tesla Motors Club forum yesterday about broken bolts on the power steering pump used on the Model S. Apparently, the company has issued a recall that affects 123,000 Model S sedans. The company recently sent a letter to Model S owners saying, “We have observed excessive corrosion in the power steering bolts, though only in very cold climates, particularly those that frequently use calcium or magnesium road salts, rather than sodium chloride (table salt),” Tesla said in a letter to owners. “Nonetheless, Tesla plans to replace all early Model S power steering bolts in all climates worldwide to account for the possibility that the vehicle may later be used in a highly corrosive environment.”

In an email to customers, the company advises, “In order to ensure your safety, Tesla will proactively retrofit a power steering component in all Model S vehicles built before April 2016. (No other Tesla vehicles are affected.) There have been no injuries or accidents due to this component, despite accumulating more than a billion miles of driving. To be clear, this recall does not apply to any Model X or Model 3 vehicles, only to Model S vehicles built before April 2016.”

No company wants bad news, but keep in mind that recalls in 2016 affected more than 50 million vehicles. It’s not that the problem isn’t serious, but Tesla has initiated a voluntary recall, something it has had to do infrequently compared to other manufacturers.

More Stores In New York

Tesla storeThe state of New York has a franchise dealer law like many other states. In 2014, its legislature carved out an exception for Tesla, allowing it to open 5 stores in the New York City area. Now a new bill has been introduced that would permit the company to open 20 more stores in the Empire State, some of them in the populous upstate region. The significant thing here is that the bill was introduced by Joe Morelle, the majority leader of the state’s legislative assembly.

The state’s automobile dealers are predictably firmly opposed to the new bill, reports upstate newspaper The Post Star. As Tesla aims to become a major car company producing millions of cars each year, having more stores will be critical to finding buyers for them all, assuming Tesla survives at all.

Years from now, we may look back on that statement and think it is ridiculous, but the fate of the company does seem to be hanging in the balance at the present time. What really is ridiculous is that even a minor shortfall in its goal to reach the 2,500 car per week production plateau will be viewed as a major setback. Maybe if Elon could learn not to paint himself into a corner with overly optimistic promises at every opportunity, the company would have fewer of these existential moments.

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Steve Hanley

Steve writes about the interface between technology and sustainability from his home in Florida or anywhere else The Force may lead him. He is proud to be "woke" and doesn't really give a damn why the glass broke. He believes passionately in what Socrates said 3000 years ago: "The secret to change is to focus all of your energy not on fighting the old but on building the new." You can follow him on Substack and LinkedIn but not on Fakebook or any social media platforms controlled by narcissistic yahoos.

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