Tesla Model 3 Production Deadline Impossible As Two Execs Depart

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Tesla founder Elon Musk said during the company’s first-quarter earnings call that he had set a production deadline of July 1, 2017 for the company’s most affordable car Model 3. He admitted in the same breath that the deadline was impossible to meet. Think of July 1, 2017 as a term paper deadline, but “there need to be penalties internally or externally for anyone who doesn’t meet that timeframe,” he added.

Tesla looking to make up to 200K Model 3 in 2017

Elon Musk’s comments come as two top production executives at Tesla are departing. Greg Reichow, the VP of production, and Josh Ensign, the vice president of manufacturing, are leaving the company. A Tesla spokesperson confirmed their departures. Reichow has agreed to stay until the company could find his replacement to ensure uninterrupted production.

A total of five vice presidents have left Tesla this year. Elon Musk said his target was to produce 100,000 to 200,000 Model 3 units in the second half of 2017, and then increase it to 500,000 units in 2018. Tesla was previously targeting to achieve 500,000 units by 2020. But strong pre-orders for Model 3 have forced the company to ramp up production faster than planned. Tesla has received close to 400,000 reservations for its mass-market electric vehicle.

Was Reichow’s departure linked to Model X glitches?

While the company said Greg Reichow was taking a “leave of absence from Tesla so that he can have a well-earned break,” a person familiar with the matter told Bloomberg that his departure was linked to delays, glitches, and other quality issues with the Model X. Musk told investors that he was imploring “the best manufacturing people in the world to join our company.”

Musk said the company was unlikely to develop the supply chain for Model 3 components in time to meet the July 1, 2017 deadline. The upcoming mass-market car is far less complicated to manufacture than the Model S and Model X. But even if one component supplier fails to meet expectations, the company will fabricate the parts itself at the Fremont facility, said Musk.


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