One Hell of a Ramp – Editors Guides

One Hell of a Ramp

By Jane Davis

The numbers are out for Tesla’s second-quarter production and deliveries. If you didn’t spend the weekend lying on a block of ice with a fan taped to your chest, you probably heard the faint sound of Tesla aficionados celebrating the automaker’s 5,000-Model 3s-per-week production goal, which was met with few vehicles to spare.

CEO Elon Musk took to Twitter on Sunday to announce the production of 7,000 vehicles during the last seven days of June, some 5,000 of them being Model 3 sedans. Steven Armstrong, CEO of Ford of Europe, shot back a reply stating his company builds that much in about four hours. (There seems to be a lot of bad blood between Ford and Tesla.)

So, how do the numbers break down for the entire second quarter? Read on.

According to Tesla, production totalled 53,339 vehicles in Q2 2018, of which 28,578 were Model 3s. Total production volume tops Q1 volume by 55 percent, and the number of Model 3s produced last quarter actually exceeds the total number of Model 3s delivered to date (28,386).

If this sounds like Tesla pulled out all the stops on Model 3 production very recently, you’d be right. Total Model 3 production in the last seven days of June amounted to 5,031 vehicles. A narrow victory for the Tesla team, but a victory nonetheless. Musk credits the new tent-bound production line outside its Fremont assembly plant (officially, “GA4”) for 20 percent of last week’s Model 3 production.

“Our Model 3 weekly production rate also more than doubled during the quarter, and we did so without compromising quality,” the automaker said in a blog post. “We expect that [the GA3 indoor line] alone can reach a production rate of 5,000 Model 3s per week soon, but GA4 helped to get us there faster and will also help to exceed that rate.”

If you’re curious, Model S and X production did not cease during this final week. Tesla reports 1,913 Model S and X builds during that time frame. Still, the number of undelivered Model 3s still in transit — 11,166 — points to an incredible ramp-up at the end of June.

The production figures for the weeks preceding that period are unknown. Averaging out Q2’s total Model 3 production gives us a figure of roughly 2,200 vehicles per week.

So, while Tesla fans cheer the production news, skepticism remains, and not just among the much-loathed “shorts.” Tesla needs to prove it can sustain this level of activity over the long term, and in a sustainable manner that doesn’t overtax man and machine. Only then will skeptics and certain investors back off from their negative impressions.

Of course, Tesla claims this exactly what it plans to do. The company said it “expects to increase production to 6,000 Model 3s per week by late next month,” adding that it’s still shooting for “positive GAAP net income and cash flow in Q3 and Q4, despite negative pressures from a weaker USD and likely higher tariffs for vehicles imported into China as well as components procured from China.”