Why Tesla Suspended Model 3 Production Last Month

The delay was to iron out production

By William White, InvestorPlace Writer


Production of the Model 3 was suspended by Tesla Inc (NASDAQ:TSLA) in February, but there’s nothing to worry about.

Why Tesla Suspended Model 3 Production Last Month
Source: Tesla

According to Tesla, the suspension of the Model 3 production was actually to help it in the long run. The company notes that during this suspension, it was able to improve its assembly process to speed up production of the vehicles.

Tesla notes that is plans suspensions like this from time to time to better its factories. This allows it to work out bottlenecks that are keeping it from putting together cars, such as the Model 3, as fast as it can.

“Our Model 3 production plan includes periods of planned downtime in both Fremont and Gigafactory 1,” a Tesla spokesperson told Bloomberg. “This is not unusual and is in fact common in production ramps like this.”

Tesla CEO Elon Musk notes that he has been told his production timelines have been “optimistic.” This proves true with the production of the Model 3 taking longer that expected. The company is hoping to get weekly production to 2,500 units by the end of March, and then 5,000 by June’s end.

Morgan Stanley analyst Adam Jonas says that the Model 3 will be a potential spot for investors to drop the stock. In a note to his clients, he says that when the Model 3 deliveries reach a certain point, it will be a good time to investors to sell their TSLA stock for profit, Electrek notes.

TSLA stock was up 5% as of Monday afternoon.

As of this writing, William White did not hold a position in any of the aforementioned securities.

Article printed from InvestorPlace Media, https://investorplace.com/2018/03/tesla-suspended-model-3-production-last-month/.

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