Elon Musk has thrown down the gauntlet at Tesla stock short sellers. The CEO wrote on his Twitter page Sunday that the sellers have around three weeks “before their short position explodes,” alluding to boosts in Tesla Model 3 production. Delivery of the company’s cheapest car, which entered production in July 2017, has become a focal point for investors as they seek to determine whether Tesla can meet its expansion goals.
Musk was responding to a question from Electrek editor Fred Lambert, who asked about concerns that a giant tent is being assembled on the north side of the Fremont plant to house the new assembly line for the Model 3. It’s all part of Tesla’s plan to produce 5,000 cars per week by the end of the month: in an email to employees last week, Musk said that progress was “getting very exciting,” and that some parts of the production system have already reached 700 cars per day, just shy of the 5,000 weekly goal.
When Tesla unveiled the start of Model 3 production almost one year ago, the company proposed it could reach a production rate of 20,000 cars per month by December. In practice, the company produced only 2,425 Model 3 cars in the fourth quarter of that year. Musk regularly referred to the early stages of production as “hell,” as the company worked hard to get production lines up to speed.
Investors have focused on the car’s production as a sticking point for Tesla’s financial future, with Goldman Sachs declaring in April that the company would sustain production at 1,400 cars per week for that quarter and necessitate a return to raise capital. Tesla has also felt this pressure internally. At the company’s shareholders meeting earlier this month, Musk described the process as “the most excruciating, hellish several months I’ve maybe ever had, and a lot of other people at Tesla,” but added that “I think we’re getting there.”
All eyes are on Tesla’s second quarter delivery report, set for publication within the next three weeks. The previous quarter report spelled good news for the firm, with a production of 9,766 cars, nearly quadrupling rates from the fourth quarter and putting the firm on pace to beat Ford’s Model T in terms of production expansion.
With such big achievements within its grasp, it’s perhaps little wonder investors are so focused on Tesla’s next production rate report.