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Tesla pushes to deliver its Model 3 sedan as pressures mount
WITH pressure escalating after one of the worst weeks in its almost 15-year-history, Tesla Inc raced to manufacture and deliver its mission-critical Model 3 sedan to burnish the numbers it is about to report to its rattled investors.
The company's Fremont, California, delivery hub was packed with people on Saturday evening as the last hours of the quarter drew to a close. The company, struggling to figure out how to mass manufacture cars, implored workers to get production on track and disprove their doubters.
The sceptics are getting louder after recent events. The electric-car maker led by Elon Musk came under regulatory scrutiny for the second crash this year involving Tesla's driver-assistance system Autopilot, the latest of which resulted in a fatality. Moody's Investors Service downgraded the company's credit rating further into junk, citing the combination of production issues and mounting obligations that could necessitate a more than US$2 billion capital raise soon to avoid running out of cash.
"Tesla is testing our patience," Gene Munster, a managing partner at venture capital firm Loup Ventures, which has been bullish on the car maker, wrote in a report on Thursday.
Mr Musk, 46, risked coming off as tone-deaf to concerns being raised by investors, sending a series of April Fools' Day tweets to joke that Tesla had gone bankrupt. The chief executive officer first unveiled the Model 3 on March 31, 2016, and Tesla's production delays have kept hundreds of thousands of consumers who placed US$1,000 deposits for the sedan waiting.
From the looks of social media posts by customers who took delivery of their Model 3 over the holiday weekend, Tesla still maintains an army of true believers who are staying put in line for their car. Amanda Bell, a software developer in Nashville, wrote on Saturday on Twitter: "Two years ago to the day, I put down a deposit on a car I'd never even seen before. Today, I picked up my dream car."
The 26-year-old said on Sunday that she likes that Tesla's cars have the ability to roll out new features via software updates. Since starting Model 3 production in July of last year, Tesla has pushed back production goals for the car several times, citing issues with battery output and automating its assembly lines.
The company forecast back in January that it would likely end the first quarter making about 2,500 units of the car a week.
Bloomberg is tracking the Model 3 rollout with an experimental tool that estimates production using vehicle identification numbers. The tracker estimates that Tesla is building about 1,190 Model 3s a week as of Sunday, though that figure may not capture a last-minute burst in output. BLOOMBERG