Elon Musk takes the wheel at Tesla to try and solve Model 3 production issues

It’s no secret that the Tesla Model 3 car has had its share of issues in production terms. The vehicle was touted as the first affordable model for the mass-market, with a lower price tag compared to Tesla’s of the past which would encourage consumers to make the move to electric cars, but deliveries of it to customers have been delayed multiple times, a fact which has repeatedly frustrated investors over the last year. Some were worried that the side projects of Tesla CEO Elon Musk (the Boring Company and SpaceX) were taking up far too much of his attention, contributing to the bottleneck in deliveries.

This may now change however. The enigmatic Musk is taking over responsibility for Model 3 production, according to sources, pushing aside his Senior VP of Engineering Doug Field. The news helped the stock to rally by over 4% on April 3rd, but may not come as a big relief to investors overall, given that Tesla shares have just seen their worst month in 7 years, down over -24%!

The biggest losses came after news broke that a Tesla driver had died using a Tesla vehicle’s autopilot mode on a California highway. Tesla say the driver received visual and audible warnings but ignored them, so it wasn’t the fault of the autopilot system but human error which caused his death.

Despite investor concerns about production bottlenecks and vehicle safety, clearly Musk has kept his trademark humour intact. On April 1st the CEO Tweeted that Tesla was bankrupt despite intense efforts to raise money including a mass sale of Easter eggs.

Though the Tweet was sent in jest, it was not a million miles from the truth. Nothing was funny about Tesla’s financial statement for Q4 2017. The company lost $1.96 billion that year, up from a $675 million loss in 2016. To boot, the company already owes investors over half a billion Dollars in interests paid annually on debt. Total liabilities for Tesla stand at $24 billion, or 84% of its assets.

There’s no guarantee that with Musk on board, the Model 3 production issues can be resolved completely, and while the massive dip in the share price might have prompted a tasty buying opportunity for investors, caution should be exercised!

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