Published On: Tue, Apr 17th, 2018

Tesla says Model 3 production shut down temporarily

SAN FRANCISCO (Reuters) – Tesla Inc (TSLA.O) has temporarily suspended its Model 3 assembly line in what the company said on Monday was a planned production pause, as the automaker continues to face challenges ramping up its new sedan.

FILE PHOTO: Tesla introduces Model 3 cars off the Fremont factory’s production line during an event at the company’s facilities in Fremont, California, U.S., July 28, 2017. REUTERS/Alexandria Sage/File Photo

It was the second time since February that Tesla has temporarily shut down its production line for the Model 3 at its Fremont, California plant.

“These periods are used to improve automation and systematically address bottlenecks in order to increase production rates,” a Tesla spokesperson said.

A BuzzFeed report, which first reported the news, said workers were expected to use vacation days or stay home without pay during the four- to five-day production pause.

After delaying production of its Model 3 sedan, Tesla is now trying to catch up to a target of building 2,500 vehicles per week by the end of the second quarter. Problems within its heavily roboticized assembly line have complicated those efforts.

On Friday, Musk acknowledged for the first time that he had overrelied on automation in the Model 3 assembly line, a stunning concession from Tesla’s leader who has previously scoffed at competitors’ manufacturing prowess and bragged about creating an “Alien Dreadnought” within the Fremont factory by 2018.

Shares of Tesla were down 3 percent on Monday, pressured by Musk’s acknowledgement, a report alleging that Tesla undercounted worker injuries – which the company denies – and an amended lawsuit originally filed last year that alleges Musk misled investors about Model 3 production.

Reporting by Munsif Vengattil in Bengaluru and Alexandria Sage in San Francisco; editing by G Crosse

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