With more than 325,000 reservations for the Model 3, demand for Tesla’s first mass market car is through the roof and showing no signs of slowing down.
Elon Musk wants Tesla to be the world’s best manufacturer so badly, he’s sleeping in the factory
Meanwhile, two top manufacturing executives are leaving.
But that presents a considerable challenge for the electric vehicle manufacturer to produce not only that number of vehicles but also meet its expedited goal of producing 500,000 vehicles by 2018 — two years earlier than the company initially planned.
On the company’s quarterly earnings call Wednesday, Tesla CEO Elon Musk said he is “hell-bent” on both meeting that challenge and making Tesla the best manufacturer in the world. How committed is he? “I have a sleeping bag … in the factory,” he said. “My desk is at the end of the production line.”
Musk said he is looking for “the best manufacturing people in the world” to help the company hit those goals, adding that it would be announcing a number of hires on the production side in the next few weeks.
Notably, just hours before the call, Tesla confirmed that two of its top manufacturing executives — Greg Reichow, vice president of production, and Josh Ensign, vice president of manufacturing — were leaving the company.
Tesla reported a loss of 57 cents a share on $1.6 billion in sales in the first quarter. Wall Street expected a loss of 56 cents on $1.6 billion in revenue. The stock jumped 4 percent after Musk announced the company’s accelerated production projections — despite missing its goal of shipping 16,000 vehicles this quarter.
Still, Musk went as far as “guessing” the company may produce one million cars by 2020.
As for the Model 3, Musk said the date he has set for both company staffers and external suppliers to begin production is July 1. Though he fully expects Tesla may miss that deadline, Musk said everyone should take that date seriously and that “there needs to be penalties internally or externally for anyone who doesn’t meet that time frame.”
The vast majority of Model 3 reservation holders — 93 percent — are interacting with the company for the first time, Musk said. In other words, the demographics of this pool of future Model 3 owners are different from the company’s existing customer base.
But much to the surprise of the company, Model S orders grew 45 percent year over year even with the demand for the Model 3.
“The more rapid pace of growth was driven by increased order growth in North America and Europe, and a more than 160 percent increase in orders from Asia compared to a year ago,” Musk wrote in a letter to shareholders. “Model S continues to be the market share leader in North America and Europe among all comparably priced four-door sedans.”
The company was also able to reduce operating expenses in Q1 for the first time in three years by 3 percent from the period a year earlier.
“Research and development expenses declined sequentially as Model X development work diminished during the quarter,” the letter said.
This article originally appeared on Recode.net.
