Dive Brief:
- Tesla's ability to deliver preordered cars is in question again when, in response to a customer awaiting delivery of Model 3 who tweeted her frustrations on Sunday, CEO Elon Musk tweeted back: "Sorry, we’ve gone from production hell to delivery logistics hell, but this problem is far more tractable. We’re making rapid progress. Should be solved shortly."
- In order to streamline production and speed up delivery, the company has already cut several color options, reports Reuters.
- Despite Musk's pledge in August that Tesla would soon be cash-flow positive and profitable, Bloomberg reported today that according to Morgan Stanley analysts, Tesla could raise another $2.5 billion in equity financing in the fourth quarter to ramp up production further and pay down looming debt.
Sorry, we’ve gone from production hell to delivery logistics hell, but this problem is far more tractable. We’re making rapid progress. Should be solved shortly.
— Elon Musk (@ElonMusk) September 17, 2017
Dive Insight:
On his second-quarter earnings conference call, Musk said that the company had produced 7,000 vehicles per week for multiple weeks in July, and he expects to average 7,000 cars per week in the third quarter.
Suspicion around Tesla's ability to produce the cars it has promised is a common concern about the company, but the idea that the logistics of delivering finished cars could be an additional bottleneck is new.
Based on her tweet, customer Megan Gale's frustration was fueled in part when she came across several dozen new Teslas sitting in the Union Pacific Railroad Depot in Salt Lake City, Utah. Her delivery time had been delayed indefinitely after receiving several confirmed and then postponed delivery dates from Tesla beginning Sept. 8. The Drive confirmed that Gale received delivery of her car Tuesday.
On the same earnings call, Musk said that "direct delivery" might be in the future for the company, but his motivation wasn't streamlined operations — it was allowing the customer to test drive the car before taking ownership.
