- Tesla CEO Elon Musk said he believes the Model 3 is the last product on which the company will have to bet its livelihood in an interview with Bloomberg.
- Musk said Tesla had previously gambled its existence on its first and second vehicles, the Roadster sports car and Model S sedan.
- The Model 3 has caused production problems and strained Tesla’s finances, but Musk has said the company will become profitable in the second half of this year.
Tesla CEO Elon Musk said he believes the Model 3 is the last product on which the company will have to bet its livelihood in an interview with Bloomberg.
“I believe Model 3 is the last bet-the-company situation,” he said.
“To the best of my judgment, I do not think we have any future bet-the-company situations. We will still need to work hard and be vigilant and not be complacent because it is very difficult just to survive as a car company. But it will not be the same level of strain as getting to volume production of Model 3.”
Tesla has made three big gambles
Musk said the Model 3 sedan was the third product on which Tesla gambled its existence, after its first vehicle, the Roadster sports car, and the Model S sedan, which represented a sizable increase in annual production.
The Roadster nearly brought Tesla to bankruptcy in 2008, but Musk has said the company closed a financing round that kept it afloat on December 24.
And shortly after the launch of the Model S in 2013, Musk stopped production and nearly sold Tesla to Google because of financial difficulties. But as Musk neared a deal with Google CEO Larry Page, Tesla started selling enough vehicles to become financially stable, and Musk decided to keep Tesla independent.
The Model 3 has strained Tesla’s finances
The Model 3 is Tesla’s first mass-market vehicle, designed to broaden the company’s customer base beyond the luxury segment and increase the rate of electric vehicle adoption. But Tesla struggled to ramp up production after it was launched in July 2017 due to excessive automation at its factories.
In May 2016, Musk said he estimated the company would make 100,000 to 200,000 Model 3s during the second half of 2017. Tesla made 2,685 Model 3 vehicles in 2017.
The company twice missed its self-imposed deadline to produce 5,000 Model 3s in a week, but hit that rate at the end of June. On July 2, the company said it had made 5,031 Model 3s during the final week of June and 28,578 during the second quarter, more than it had made in the prior three quarters combined.
The vehicle has put a strain on Tesla’s finances, as the company has posted significant losses in the quarters since it was launched. But Musk has said the company will become profitable in the second half of this year.
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