The firm had already outlined plans to hit 6,000 per week by late August, and stressed that its focus was on improving current manufacturing lines instead of adding new ones. That should keep costs down, it said. All told, Tesla made 53,339 cars in the quarter and delivered 40,768 of them, 18,449 of which were Model 3s.
The company needs the extra output. While it did boost its car sales revenue year-over-year while cutting its cash outflow, it’s still bleeding money. Tesla posted a net loss of $742.7 million (versus $401.4 million a year earlier), and its main cash stockpile has dropped from nearly $3.4 billion at the end of 2017 to $2.2 billion today. Layoffs and other cost-cutting measures will only slow those losses — it needs to make a large enough volume of Model 3 vehicles that it isn’t taking a bath on each sale. The 5,000-car mark was supposed to represent that tipping point, but we won’t know if that’s truly the case until the next earnings release in the fall.
The higher production rate is also vital to meeting the core promise behind the Model 3: a relatively affordable EV. It can’t hit the fabled $35,000 price until it can afford to make the standard vehicle without steep losses, and that’s not about to happen when it can barely make higher-spec variants at that level. Tesla is in a much better position to fulfill its objectives than it was just a few months ago, but it’ll still need to hurry if it wants to fulfill all its pre-orders and give rivals like Polestar a run for their money.