Tesla shuts down Model 3 assembly again to fix bottlenecks

Tesla to push for 6000 Model 3 cars per week by end-June, Musk says

In a letter distributed to employees and obtained by Electrek, CEO Elon Musk has explained that an upcoming shutdown will "set us up" for production rates of 3,000-4,000 units per week by next month. According to the company chief, the new margin will leave no margin for error across the company's manufacturing process and the supply chain. "Actual production will move as fast as the least lucky and least well-executed part of the entire Tesla production/supply chain system", Musk was quoted as saying. 6,000 by the end of June does indeed look achievable if 24/7 production works without a hitch.

"We will be stopping for three to five days to do a comprehensive set of upgrades".

Elon Musk also announced plans to hire 400 people per week for several weeks at the Freemont facility and the Gigafactory in Nevada.

From now, he said that any capital or miscellaneous expenditure above $1 million, or set of expenses that may accumulate to $1 million over the next 12 months, "should be considered on hold until explicitly approved by me". He acknowledged criticism that Tesla is "not a real company" until it generates profit and said this is a goal now that Tesla has more scale. Musk describes the contractor situation within Tesla as being like a "Russian nesting doll" and that some perform "worse than a drunken sloth". This means a lot of middle-managers adding cost but not doing anything obviously useful. While he tweeted last week that Tesla would be profitable and cash flow positive in Q3 and Q4, so it obviously doesn't need to raise money, in the email Musk was not so upbeat and rather focused on cost cuts.

The Model 3 was already proving a problem production-wise, and when one of Tesla's older vehicles was involved in a fatal crash leading to a voluntary recall, it not only augmented the concerns for the Model 3, but led to a downgrading of Tesla's credit status.

As press reports begin to mount up about quality issues with its critical Model 3, Bloomberg reported that Tesla will shut down the Model 3 production line to improve automation on the Model 3 assembly line at its factory in Fremont, California.

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