Several media outlets reported that Tesla Inc. (NASDAQ: TSLA) met its goal of producing 5,000 of its Model 3 vehicles in one week. Tesla had to make a huge ramp up in production to get there. Based on problems that bedeviled the rise, the number may not be sustainable, which will raise more questions about the company’s future.
Investors and skeptics will be able to take another run at Musk’s goals when Tesla reports either its monthly sales or its next quarterly report. And there are reasons to believe Tesla will fall short of the 5,000 a week number.
First and foremost among the reasons Musk may not keep up with his goal is the admission of how massive the push was to get to 5,000. For starters, Musk had to sleep on the factory floor over the days leading up to the success. Workers were pulled from other parts of the company. In the week that Tesla workers made 5,000 Model 3 cars, the total production for all other models was only 2,000.
Next, Tesla had problems with some people and machines as it strove to reach its goal. Production slowdowns have been frequent, which is why Tesla failed to hit numbers when it reported its most recent quarterly results. Goldman Sachs recently forecast that the problem will not be resolved soon. The issue could be worsened by difficulties in Tesla’s supply chain. This has been a problem in the past as well.
Musk’s relationship with his factory workers has not always been smooth. There have been reports of worker fatigue and injury. Resolving these problems may not be done internally, and those reports may bring in regulators.
Finally, there is Musk himself, who has sometimes proven to be his own worst enemy. Whether he is distracted by one of his other enterprises or unhappy with the color of Model 3 seats, more than anything else, he is the wildcard when it comes to the regular production of 5,000 Model 3 cars a week.
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