Earlier this month Tesla CEO Elon Musk told a South by Southwest audience that delays on the Model 3 had him tossing and turning at night.
He’s probably looking ahead to a sleepless weekend.
One day after Popular Mechanics awarded the Tesla Model 3 with “Car of the Year,” Bloomberg reported on internal emails announcing that Tesla will pause production Thursday and Friday on its Model X and S cars to focus on getting more Model 3s off the line.* (Tesla later told Bloomberg this shift would take place only Friday and told Greentech Media that Model S and X workers could volunteer to work on Model 3 production that day, but were not required to. Other options for those workers was to use paid time off or take unpaid time off. ) The production push will last through Saturday.
“Let’s make them regret ever betting against us,” wrote engineering chief Doug Field in an email obtained by Bloomberg. “You will prove a bunch of haters wrong.”
The troubles keep coming for Model 3 production. On Tuesday, Moody’s downgraded Tesla’s credit outlook to negative based on the “significant shortfall in the production rate” for the car.
“The negative outlook reflects the likelihood that Tesla will have to undertake a large, near-term capital raise in order to refund maturing obligations and avoid a liquidity short-fall,” said Moody’s in a release. “Prospects for addressing its liquidity requirements (whether equity, convertible notes or debt) will be supported if the company can establish credibility for reaching Model 3 production levels.”
Musk once referred to the Model 3 process as “production hell,” a characterization that has proven to be accurate once again. Along with delays, some of the shipped cars have reportedly had quality problems and defects, including issues with touchscreens and battery capacity.
Tesla is still pushing to make 300 Model 3s a day. The emails, sent last week, said the company was producing over 200 per day. But both of those figures fall short of the company’s Q2 goal to produce 5,000 of the cars per week. It’s already delayed that target twice.
In its announcement on downgrading the company’s credit, Moody’s noted that Tesla produced 2,425 Model 3s in Q4 2017. Moody’s also warned of a further downgrade if Tesla falls short of its updated production goals.
“The world is watching us very closely to understand one thing: How many model 3s can Tesla build in a week?” Field wrote, urging workers to continue working toward an “incredible victory.”
Tesla's stock was down roughly 25 percent in March. The company may need $2 billion or more in cash to keep Model 3 production steady through 2019.
*This story has been updated to reflect clarification from Tesla.