While investors have never questioned Tesla’s ability to generate demand for its vehicles, the company’s achilles heel has long been its inability to ramp up production fast enough to meet that demand. Indeed, every single Tesla vehicle ever released has been subject to production delays, from the original Roadster all the way up to the recently released Model 3.
Early on, Tesla was confident that it would be able to manufacture 5,000 Model 3 units per week by the end of 2017, a goal that the company didn’t even come close to reaching. Subsequently, Tesla moved its 5,000/week goal back a few months, with the company now claiming that it will be able to manufacture 20,000 Model 3 units per month by June of this year.
With that said, Tesla next week will disclose its production numbers for the first quarter of 2018 and investors will undoubtedly be paying close attention to the results. Remember, Elon Musk earlier this year said that Tesla would be able to reach a threshold of 2,500 units/week by the end of March. That being the case, Tesla shares — which are already reeling — may fall even further if the actual production figure comes in far below that.
In the meantime, Bloomberg relays that a few analysts are of the mind that Tesla will miss its 2,500 units/week goal by a wide margin. Specifically, Rod Lache of Deutsche Bank believes that Tesla’s current Model 3 production rate is somewhere in the 1,110/week range. Meanwhile, Gene Munster of Loup Ventures believes that Model 3 production, in a best case scenario, is likely around 2,000 units per week.
“It’s going to be worse before it gets better,” Munster told Bloomberg. “They’re probably going to miss their Model 3 number in terms of what the Street is at. I don’t think it’s going to be a surprise to investors.”
Interestingly enough — though not at all surprising — Tesla is making a big push to boost production before the quarter draws to a close. In an internal memo obtained by Bloomberg, Tesla engineering chief Doug Field recently implored company employees to “prove the haters wrong.”
“The world is watching us very closely, to understand one thing: How many Model 3’s can Tesla build in a week?” Field’s note reads in part. “This is a critical moment in Tesla’s history, and there are a number of reasons it’s so important. You should pick the one that hits you in the gut and makes you want to win.”
At the time of Field’s memo, Tesla was manufacturing 200 Model 3 units a day, a figure which Field was aiming to increase to 300. Even if we assume that Model 3 production did, in fact, reach the 300 units per day mark, that’s still only 2,100 units per week.
“If we keep climbing from 300 through the end of the week, it will be an incredible victory,” Field’s note concludes. “Your friends and family will hear about it in the news.”
