Tesla Awaits Tooling to Boost Model 3 Production

This week Tesla Inc. told customers eager to buy its Model 3 electric sedan that deliveries have again been delayed by production snags. The latest holdup threatens the company’s aim of hiking output to 2,500 cars per week by the end of March.

The latest issue is an automated production system needed at Tesla’s big battery plant in Nevada, Bloomberg News reports. The so-called Gigafactory is supposed to supply lower-cost lithium-ion batteries for the Model 3.

CEO Elon Musk says the equipment has been tested in Germany and is ready to go. But the tooling must be knocked down, shipped from Europe to the U.S. and reassembled.

Bloomberg says Tesla also must upgrade the material handling capabilities of its vehicle assembly plant in Fremont, Calif. Analysts say the two factors make Tesla’s March production goal “extremely aggressive.”

Launching the repeatedly delayed Model 3 is critical for Tesla’s bid to generate the sales volume and cash flow it needs to move from niche player to mass-production carmaker. Analysts say Tesla did a good job in the fourth quarter managing the negative cash flow associated with the Model 3 and Tesla’s other new-product development projects.​​​​​