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The electric car is a concept with great promise, but as of yet, no one’s developed a feasible economic model for mass-producing them and making them a part of mainstream American life. But Elon Musk has been on a mission to change that, and it’s beginning to look like the eccentric billionaire may actually be onto something. The Associated Press reports that Tesla has hit its much-ballyhooed goal of producing 5,000 Model 3 vehicles in a single week, a figure that may indicate a realistic path to keeping the Tesla brand sustainable.
When the Model 3 first began rolling off the assembly line a year ago, Musk proclaimed that his goal was to be cranking out 5,000 cars a week by December. That didn’t happen, as the CEO says his company entered “manufacturing hell” and struggled to meet production goals. Six months later, though, the company came through. With 5,000 Model 3s and an additional 2,000 combined Model S sedans and Model X sport-utility vehicles to boot, Tesla set a record with 7,000 vehicles in a week.
Sustaining that progress will be the next challenge.
“Reaching it is one thing,” said Dave Sullivan of market research firm AutoPacific. “Consistently producing 5,000 per week with outstanding quality is another. I don’t think producing 5,000 once is anything to get excited about until it’s repeatable.”
It’s critical that Tesla take the next step and find a sustainable way to actually sell these cars. As the AP noted, the company has never had a profitable year, and it burned through over $1 billion in cash in just the first quarter of 2018. Investors are becoming impatient with steady losses, and Moody’s Investor Service downgraded the company’s debt to “junk” territory earlier this year.
The good news for Tesla is it claims to have about 450,000 orders for the Model 3 locked in. It’s unclear, though, what price those customers are willing to pay. Initially, the car’s base price was announced at $35,000, but Tesla is currently only selling the Model 3 at prices ranging from $49,000 to over $70,000.
In addition, there are safety issues the company needs to address. There are two federal agencies currently investigating five recent Tesla vehicle crashes, some involving the semi-autonomous “Autopilot” system and others that include alarming cases of post-crash battery fires.