Tesla Model 3 Production On Double Time, Company To Face A Tough 2017

Tesla Model 3 Production On Double Time, Company To Face A Tough 2017
Slowly, the world is warming up to the idea of autonomous vehicles. Elon Musk-led Tesla is one of the leading players in this area, but the company has a tough year ahead of it - even with demand for the Model 3 increasing. Photo : Tesla/YouTube

The world always had the idea of an autonomously driven car, but despite how real it had started to look in movies, it seemed like technology that would be built for future generations. That is - arguably - until Tesla came in the picture. Some will credit the rise of self-driving cars to the Elon Musk-led company, but this does not mean that the road ahead is smooth - no matter how sought after its upcoming Model 3 is.

Tesla's upcoming project, the Model 3, is in relative demand. So much so that there has been fear that the company will not be able to hit its production targets for the year. However, Street Insider notes that the car manufacturer is actually well in terms of meeting its quote and thereby the public's overall demand.

In order to do this, the publication credits analyst Jennifer Liang for an explanation. Liang, who works for Chinese firm KGI, confirms that Tesla has sped up its production for the Model 3 by introducing system integrators (SI) in the supply chain, as well as by strengthening automation. So instead of waiting for shipments, the company has - technically - in house help.

"Versus supply chain management for Model S and X, where nearly all parts and components are shipped to Tesla's Fremont factory in California for sub- and final assembly, Tesla has brought in two SIs, located in Thailand and China, for various sub-assembly for Model 3," Liang said. "Its recent acquisition of Grohmann Engineering (DE), a specialist in automated manufacturing, is clearly another endeavour by Tesla to accelerate Model 3 production."

Liang also went on the record to say that it is more likely that Tesla will not meet its targets despite this change in operation. However, the order backlog of about 400 thousand units is bound to do well for the company in terms of visibility.

But Tesla has more to tackle in 2017, as noted by Business Insider. This year also marks Musk's 10th year of handling the company. Musk undoubtedly has plans to mark this - he did, after all, turn the tides in favor of a company that was almost bankrupt to what it is today: A US$30 billion company.

While this number is relatively staggering, there is one thing that will definitely cause a blip this year. The publication notes that the integration of SolarCity - whose CEO is Musk's cousin - with Tesla. SolarCity brings with it about US$3 billion worth of debt, but there is more to the story. The publication points out that there might be more difficulty in putting together a carmaker and a solar-panel lessor and installer.

The company may not be the fastest in terms of manufacturing, but it is still way above the water in terms of profits. Last year, for example, may have only produced a maximum of 100,000 electric cars but the company still finished the year with US$1.2 billion in cash. There is no doubt that Tesla has a tough year ahead of it - but it the past decade has proven anything, it is that the company will power through and come out stronger and more learned.

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