Tesla CEO Elon Musk has set an aggressive new target for production of the Model 3. According to an internal email obtained by Jalopnik, Tesla’s Fremont, California factory will operate 24 hours a day in order to meet the production goal.
Tesla needs to make 6,000 Models 3 units per week by the end of June. This is an increase from the company’s previous target of 5,000 per week. According to the company chief, the new margin will leave no margin for error across the company’s manufacturing process and the supply chain. Thus, the actual production will be much faster in the Tesla production/supply chain system.
In order to accomplish the new production goal, Tesla is stopping work at the Gigafactory today. Tomorrow, it will stop work at Fremont, for three to five days. Meanwhile, it will use this time to perform a series of comprehensive upgrades that will allow Tesla to reach production rates of 3,000 to 4,000 per week during May.
Elon Musk also announced plans to hire 400 people per week for several weeks at the Freemont facility and the Gigafactory in Nevada. The extra workers will help the company add a third shift of work for the “assembly, body and paint,” allowing the facilities 24/7 operations.
Musk has also put all capital or other expenditures above a million dollars or a set of expenses that may accumulate to a million dollars over the next 12 months on hold. This is to ensure each and every manager understands the supplier quotes, including every line of the item of parts and labor.
“I have been disappointed to discover how many contractor companies are interwoven throughout Tesla,” Musk writes in the email. “Often, it is like a Russian nesting doll of contractor, subcontractor, sub-subcontractor, etc. before you finally find someone doing actual work. This means a lot of middle-managers adding cost but not doing anything obviously useful. Also, many contracts are essentially open time & materials, not fixed price and duration, which creates an incentive to turn molehills into mountains, as they never want to end the money train.”
The Model 3 is key to Tesla’s efforts to generate enough revenue to pay off investors and increase development of other electric vehicles.
The announcement to increase the production of Model 3 to more than 3,000 per week came three days after Musk expressed confidence he could speed up the production.