Tesla abruptly announced a production freeze of its Model 3 vehicles Monday night, just days after CEO Elon Musk vowed the company would be speeding up its assembly line.
The Silicon Valley automaker on Monday told employees working on the Model 3 assembly line they could either choose to stay home without pay or use vacation days, while a few employees will be relocated to other projects within the Fremont, Calif. factory. Tesla said in a statement that the decision to temporarily halt production was planned in order to “improve production,” but employees told BuzzFeed News that the decision came abruptly.
The pause is expected to last four to five days.
“These periods are used to improve automation and systematically address bottlenecks in order to increase production rates,” a Tesla representative said Monday.
The halt in production of its Model 3 — the company’s most affordable vehicle, which Musk is banking will become a hot seller — comes as Tesla continues to face production roadblocks. Musk had previously boasted about his automated assembly line, which he referred to as “Alien Dreadnought.” After continually missed production targets, however, Musk admitted on Friday that he over-relied on automation for the Model 3.
Yes, excessive automation at Tesla was a mistake. To be precise, my mistake. Humans are underrated.
— Elon Musk (@elonmusk) April 13, 2018
This is not the first time Tesla has halted Model 3 production, having temporarily paused assembly back in February. At the time, Tesla said the pause was “common in production ramps like this” and was intended to ultimately increase production — a nearly identical statement to the one issued Monday.
The decision to halt production comes as problems continue to mount for the Silicon Valley automaker.
Musk has been criticized for setting production goals that go wildly missed. He announced in July 2017 that Tesla would be churning out 20,000 Model 3s a month by December of that year. However, the company only managed to producer fewer than 2,500 in the entire fourth quarter of 2017. He then claimed his company would churn out 2,500 Model 3s a week by the end of March and 5,000 a week by the end of June. Once again, actual numbers missed their targets, with Tesla’s first quarter report revealing it was only churning out 2,000 Model 3s a week.
In a sit-down interview that aired Friday, Musk once again made bold predictions about Tesla’s future production rate, saying the company would likely have “a three or four-fold increase in Model 3 output in the second quarter.” He did not, however, mention the impending decision to halt production entirely.
Despite Musk’s insistence to the contrary, analysts believe Tesla will need to raise additional capital or else go broke.
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