Tesla Inc. confirmed Monday afternoon that it has halted production of its new Model 3 electric car for a second time.
“Our Model 3 production plan includes periods of planned downtime in both Fremont and Gigafactory 1,” a Tesla spokesman said, in repeating the company’s statement from a weeklong shutdown in February. “These periods are used to improve automation and systematically address bottlenecks in order to increase production rates. This is not unusual and is in fact common in production ramps like this.”
Tesla TSLA, -1.21% credited the first pause in production of the new car at its Fremont, Calif., plant with helping to ramp up production, which is behind the schedule Chief Executive Elon Musk laid out for the car last year. Some analysts posited that the delay allowed the company to build up its supply of batteries from the Gigafactory, Tesla’s battery factory in Reno, Nev., which is also trying to ramp up production to meet ambitious schedules.
After BuzzFeed News first reported the delay Monday afternoon, Tesla stock declined 0.4% in after-hours trading. The stock has declined 6.5% so far this year, while the S&P 500 index SPX, +1.07% has gained 0.2%.
After the first delay in February, Tesla said it increased its production rate closer to the goals Musk had set forth in reporting deliveries for the first quarter by improving automation. Tesla said it produced 9,766 Model 3 cars in the first three months of the year, and 2,020 in the final week of the quarter. After revising earlier production projections, Musk was hoping to produce 2,500 cars a week by the end of the first quarter and 5,000 a week later in the year.
“We were able to double the weekly Model 3 production rate during the quarter by rapidly addressing production and supply-chain bottlenecks, including several short factory shutdowns to upgrade equipment,” Tesla said in announcing first-quarter deliveries earlier this month.
Since then, however, Musk has admitted that he may have been counting on robots to do too much of the manufacturing of his cars. Tesla’s chief executive has repeatedly denied that the company will need to raise more capital to make up for the lack of cash flowing in from the Model 3, for which Tesla claims to have roughly 500,000 reservations that require a $1,000 deposit.
Tesla was the subject of a podcast and article released by investigative-reporting outlet Reveal on Sunday evening that claimed the company failed to report some injuries in its Fremont plant last year amid the production ramp. A Tesla blog post called the story “an ideologically motivated attack by an extremist organization working directly with union supporters” that “reflects a lack of understanding about how injury reporting works.”