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Fear of “Manufacturing Hell” Has Investors Unplugging From Tesla

Model 3 ramp-up could prove seriously challenging, CEO Musk warns.

by on Aug.01, 2017

An SRO crowd gathers for the event marking the delivery of the first Tesla Model 3 on 7-28-17.

After spending months driving up the shares of Tesla, Inc., investors seemed ready to run on Monday after outspoken CEO Elon Musk warned that his company could face a half-year of “manufacturing hell” trying to ramp up production of the new Model 3 battery-electric sedan.

The Model 3 is Tesla’s long-awaited entry into the mainstream market, with prices ranging from around $35,000 to $60,000. The California carmaker is believed to have as many as 400,000 advance reservations. But it will face a serious challenge, Musk acknowledged, boosting production at the Tesla plant in Fremont, California to the point where it can roll out the promised 500,000 vehicles next year.

Breaking News!

Investors aren’t the only ones worried. A group of Tesla workers on Monday asked the company’s board to provide a plan that will, among other things, address worker safety during an aggressive ramp-up aiming to boost production almost five-fold from 2017 to 2018. Tesla has come under fire in recent months over allegations of unusually high injury rates at the suburban San Francisco plant.

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Tesla Workers Suffer Injuries “On Regular Basis,” Reveals New Report

Rate of injuries declining, company says.

by on May.25, 2017

The Tesla plant in Fremont originally was built by GM and later run as a GM-Toyota joint venture.

Workers at the Tesla assembly plant in Fremont, California suffered injuries at a 31% higher rate than the auto industry average, according to a new study by the non-profit group Worksafe, and more serious injuries occurred almost twice as often.

The study could complicate Tesla’s challenges at its only plant – which is getting ready to start production of the critical new Model 3 battery-electric vehicle at the same time there is a push by some workers to create a local union.

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Beyond the Headlines!

For its part, Tesla confirmed it has had problems, though it insists the issue is rapidly being addressed. “We may have had some challenges in the past as we were learning how to become a car company, but what matters is the future and with the changes we’ve made. We now have the lowest injury rate in the industry by far.”

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