Tesla’s Q-1 earnings came in at a $283-M loss.
Two Tesla Motors (NASDAQ:TSLA) production chiefs are leaving the EV country as it struggles to launch its mass-market Model 3 car and increase production.
According to filings and media reports, the departures follow a rocky production start for the company’s Model X sport utility vehicle, a technology-heavy crossover that faces huge problems including parts shortages and quality issues, such as doors that do not close and lock properly.
Tesla’s VP of Production, Greg Reichow (an industry leader) chose to take a leave of absence for a “well-earned break,” a Tesla spokesperson said.
CEO Elon Musk said Mr. Reichow and his team deserved credit for “building an all-new manufacturing organization from the ground up” and making the Model S sedan and Model X a reality.
Mr. Reichow, who has led Tesla production for the past 3 years at a $6.5-M annual salary, and has been employed for 5 years at Tesla, will stay on until a successor is found to ensure a “smooth handoff,” the company said.
Mr. Reichow was the highest paid employee at Tesla.
Tesla confirmed its Vice President of Manufacturing, another industry leader, Josh Ensign, has also left the company. All of this coming at a critical time for the company saying it is “looking” for replacements for the Key executives.
Tesla says the Model X issues have been “resolved” and production of the SUV, which began deliveries in September, is “on track”.
Mr. Reichow lookss to be stepping out between projects, leaving before he can become tangled up in the production of the Model 3. The same is likley true for logistics and manufacturing expert John Ensign.
The company hopes to produce 500,000 vehicles annually by Y 2020, led by its Model 3, which is to be priced around $35,000 and due to begin production at the end of Y 2017.
Many analysts, including me, question whether the company will be able to handle a 10X increase in production, given demand for the Model 3, which has already received about 400-K reservations (a $1000 ea) in the month following its unveiling on 31 March.
Tesla now finds itself in difficult spot when it comes to delivering on the wildly ambitious goals CEO Elon Musk has set for the Model 3.
A recall was issued for the Model X sedan due to a problem that could lead to the rear seats snapping forward in a crash.
More people ordered the $35,000 Model 3 than there are existing Tesla owners, meaning the company will need to really scramble to get its Gigafactory up and running, all coming at a time when the Wall Street “darling’s” leadership is in question.
Instead of holding back, Mr. Musk has accelerated the pace, suggesting that 500,000 new vehicles will be available by Y 2018 instead of the original goal of Y 2020. Meaning that Mr. Musk will have to raise billions more in equity and dilute the company’s current shareholders.
Stock heading due South in a Bearish trend.
Continuing hyperbole and delivery failures are to be expected.
|HeffX-LTN Analysis for TSLA:||Overall||Short||Intermediate||Long|
|Neutral (-0.09)||Bearish (-0.38)||Neutral (-0.10)||Neutral (0.22|
Have a terrific weekend.