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New “Hell” for Tesla, as Model 3 Deliveries Run Into Serious Delays

“We’ve gone from production hell to delivery logistics hell.”

by on Sep.17, 2018

Dozens of Tesla Model 3 sedans are reportedly being held in this Union Pacific freight depot in Salt Lake City.

After more than a year of struggles, Tesla appears to finally be getting the production bugs worked out at its battery and assembly plants, but that may not mean much to frustrated buyers waiting to take delivery of a new Model 3.

In recent days, new issues have cropped up, in one case a small fleet of the battery-sedans have been held up at a Union Pacific freight depot leaving Tesla and its customers unsure when they will be released for delivery.

Beyond the Headlines!

Responding to a customer who complained by tweet that she now faces an “indefinite” delay in getting her Model 3, Tesla CEO Elon Musk responded, “Sorry, we’ve gone from production hell to delivery logistics hell, but this problem is far more tractable. We’re making rapid progress. Should be solved shortly.”

That “production hell” is a reference to the comment Musk made more than a year ago, just before the official launch of Model 3 production, when he accurately predicted Tesla would face major factory delays.

(Woman injured in Model S Autopilot crash sues Tesla. Click Here for the story.)

Though production officially began in July 2017, Tesla produced less than 1,000 of the battery vehicles by the end of the year and output fell short of 2,000 a week during the first quarter of 2018. Things only began to fall into shape by mid-year as Tesla hit an output of 5,000 a week.

Last month, the company estimated it would build 55,000 Model 3s during the third quarter, with Musk indicating Tesla is still pushing to get total output from its Fremont, California factory up to 10,000 in the near future. That figure would include the Model 3, as well as the older Model S sedan and Model X SUV.

But the now problem is one of logistics: getting cars from the factory to customers.

“There are 42 Teslas sitting at the Union Pacific Railroad in SLC (Salt Lake City),” customer Megan Gale wrote Musk in a tweet on Sunday. “My car is one of these. I’ve been I was getting delivery the 8th, then the 15th, then the 20th, then the 22nd, and now my delivery has been delayed indefinite(ly). Please make this right.”

(Click Here for more on the latest flap surrounding CEO Musk smoking on a podcast.)

According to several reports, the Teslas being held in Salt Lake City have been sitting at the railroad compound for nearly a week. The California-based automaker has yet to provide specific details as to why the cars have been delayed, nor confirm whether there have been logistics problems elsewhere in the country, something Musk’s response to buyer Gale seems to suggest.

The timing, however, is significant, and could cause further problems for a company struggling to boost production, sales and deliveries in order to drive up revenues. Tesla CEO Musk has promised that the company will not only turn a profit for the second half of 2018 but also be cash-flow positive.

The “logistics hell” it now faces is just one of the growing list of issues troubling Tesla, however.

  • On Sunday, a fire broke out at the Gigafactory battery plant in Reno, Nevada. It has not been revealed how much damage was caused by the incident, though Tesla said the plant resumed production later in the day;
  • The 47-year-old Musk has run into a series of personal issues, most recently taking fire for smoking marijuana during an appearance on the widely followed podcast of comedian Joe Rogan;
  • Musk is also facing an SEC investigation – as is Tesla – following his short-lived August bid to take the company private;
  • There are a series of safety investigations now underway, some looking at potential problems with Tesla’s vehicles and the semi-autonomous Autopilot system, but at least two others probing potential safety problems at its factories.

(To see more about safety groups wanting Tesla Autopilot name banned, Click Here.)

The automaker also faces a series of lawsuits, including several filed by investors, as well as another filed by a former employee and self-styled whistleblower who, in turn, Tesla has sued in federal court and accused of committing sabotage.

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