Struggling Tesla speeds up production of Model 3 vehicles

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The electric auto company initially planned to produce 5,000 Model 3 sedans a week by the end of 2017, but that number was quickly revised as the low-priced vehicle's production began faltering.

For more than eight months after the first Model 3 cars were delivered to buyers at the end of July 2017, Tesla has struggled to get Model 3 production rates up to the numbers promised by CEO Elon Musk. Specifically, Tesla for the quarter manufactured 2,020 Model 3 units, falling a few hundred units short of the 2,500 threshold Musk claimed Tesla would reach a few months ago. Model 3 production represented a fourfold increase from the previous quarter, with production doubling during the quarter as supply-chain bottlenecks were addressed, Tesla said. As a result, the company says it "does not require an equity or debt raise this year, apart from standard credit lines". Tesla shares opened up as much as 6.9 per cent and gained 2.2 per cent to US$258.11 as of 9:47 a.m., regaining some ground after a 22 per cent slump in March.

This story will be updated. A new production line had been built for it at Tesla's Grohmann Automation labs in Germany and was scheduled to be installed last month.

The issue has not led to any accidents or injuries and doesn't impact the Model X sport utility vehicle or the more affordable Model 3. As a result, the company expects to be building approximately 5,000 units per week in about three month.

Net Model 3 reservations remained stable through the first-quarter.

Tesla may have steered itself away from a financial precipice, after the USA electric carmaker announced that it had finally started to produce its Model 3 on a scale that could lead it to the mass market.

That came just days after Moody's Investors Service downgraded Tesla's debt ( further into junk-bond arena, citing concerns about potential liquidity pressures.

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For the press release, the company produced 34,494 vehicles in total. He agreed that Tesla needed eng & prod better aligned, so we don't design cars that are insane hard to build.

Some buy-side Tesla watchers have previously questioned whether the company could sustain such numbers and also anxious about profitability.

As of Monday, April 2, Tesla shares were at $254, which was down 4.4 percent.

Tesla still has loyal investors, including Zevenbergen Capital Investments in Seattle, which has owned the stock since the company's initial public offering.

Interestingly enough, despite all the trouble that the company is in, in an interview with CNBC, tech analyst Gene Munster stated that he still had faith in Elon Musk and Tesla.

In a letter to investors, Tesla struck are more formal, and optimistic note.

Earlier this year, Bloomberg launched an experimental model to track Model 3 production using vehicle identification numbers (VINs).