Tesla has temporarily halted Model 3 production as it aims to tackle bottlenecks

 
Rebecca Smith
Musk is the founder and chief executive of Tesla
Musk is the co-founder and chief executive of Tesla (Source: Getty)

Elon Musk's Tesla has pressed the pause button on its Model 3 assembly line for a brief period.

The firm said the planned stoppages are used to "improve automation and systematically address bottlenecks in order to increase production rates".

Tesla is under pressure to meet targets amid what Musk has dubbed "production hell". The car firm is trying to scale up manufacturing capacity to try and meet the wave of demand for its more affordable electric sedan.

Read more: Tesla's Elon Musk calls Model 3 delays a "time shift" of up to nine months

For the first quarter though the car firm did say output had "increased exponentially" and it doubled the weekly production rate during the quarter.

It has been looking to rapidly tackle production and supply chain bottlenecks, including using short factory shutdowns to "upgrade equipment".

In the last week of the quarter through to the beginning of April, Tesla produced 2,020 Model 3 vehicles. It is targeting a rate of around 5,000 units a week in around three months.

BuzzFeed, which first reported the news of the fresh pause, said workers were expected to use holiday time or stay home without pay during the pause of four to five days.

The car giant has said its race to ramp up production is on track meaning it will not need to raise further capital.

In its first quarter update, Tesla said:

Tesla continues to target a production rate of approximately 5,000 units per week in about three months, laying the groundwork for Q3 to have the long-sought ideal combination of high volume, good gross margin and strong positive operating cash flow.

As a result, Tesla does not require an equity or debt raise this year, apart from standard credit lines.

Last week, Musk rebuffed a comment from investment bank Jefferies, which had predicted Tesla will need $2.5bn to $3bn this year, while credit ratings agency Moody's downgraded Tesla's debt last month, saying the firm "will likely need to raise additional capital during the second half of 2019".

"Tesla will be profitable and cash flow in Q3 and Q4, so obv no need to raise money," Musk tweeted.

Read more: Billionaire Elon Musk denies Tesla will need to raise money this year

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