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Tesla Model 3 Plans Remain Troubled As Output Stops Again

Tesla Model 3 Plans Remain Troubled As Output Stops Again.

“Tesla may need to redesign final assembly and reduce automation. This may require the product itself to be redesigned as well”

Tesla Inc efforts to ramp up Model 3 production took another hit in mid-April as the company shut down production for a week.

Tesla said it is still on target to make about 5,000 Model 3s a week by around the end of the 2nd quarter, and CEO Elon Musk conceded that he had been over-ambitious in his plans to automate production, saying in a tweet that “humans are underrated”.

Bernstein Research said Tesla had unrealistic automation goals.

“Tesla has tried to hyper-automate final assembly. (It) has spent twice what a traditional (manufacturer) spends per unit on capacity. It has not only automated stamping, paint and welding as most other manufacturers do, it has also tried to automate final assembly,” said Bernstein analyst Max Warburton in a report published at the end of March.

Warburton said automation in final assembly doesn’t work. The likes of Fiat, VW and GM have tried and failed. Manufacturers now reduce automation of this process, he said.

“We see a possibility that Tesla may need to redesign final assembly and reduce automation. This may require the product itself to be redesigned as well,” he said.

Meanwhile after Tesla’s report at the start of the month, analysts have been scrambling to change their forecasts.

“We now see Tesla delivering about 157,000 Model 3s in 2018, with a weekly production run-rate of 4,600 at the end of Q2 and 6,000 units at year end,” said investment researcher Evercore ISI.


 

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