Here’s How Musk Justified Building Cars in a Giant Tent



Tesla car production

In the last couple of weeks, Tesla’s (TSLA) CEO, Elon Musk, has been quite active on Twitter in regards to updating investors about the company’s ongoing efforts to reach its Q2 production goal. TSLA expects to be able to take the Model 3 production rate as high as 5,000 units per week by the end of Q2. During the company’s annual shareholder meeting on June 5, Elon Musk reassured investors that Tesla is very likely to reach a production rate of 5,000 units per week for Model 3 by the end of this month.

Making cars in a tent

On June 16, Musk shared an image of the new Model 3 production line on Twitter, saying, “Amazing work by Tesla team. Built entire new general assembly line in 3 weeks w minimal resources.” The image showed a dual-motor performance version of the Model 3 coming out of the new assembly line, which was located in a tent-like structure outside its Fremont-based factory.

When asked by one Twitter user about the decision to build a factory in a tent rather than a conventional facility, Musk tried to justify this move. In response, Musk suggested that Tesla “Needed another general assembly line to reach 5k/week Model 3 production. A new building was impossible, so we built a giant tent in 2 weeks.”

New to the auto industry

A popular company producing cars in a tent may sound unusual, but Tesla has turned this into reality. Other legacy automakers (XLY) such as General Motors (GM), Ford (F), and Fiat Chrysler (FCAU) already have multiple plants in many locations around the world. On the other hand, Tesla, a relative newbie to the auto industry, is highly dependent on its Fremont-based manufacturing facility, and the construction work of its Nevada-based Gigafacotry is still underway.

While Tesla’s move to build cars in a tent could be uncommon in today’s auto industry, if it helps the company hit its Q2 target, it’s likely worth the effort, as all investors are eyeing Tesla’s Q2 production data at the moment.

Continue to the next part where we’ll analyze short interest in Tesla’s stock.

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