The manufacturer of electric vehicles, Tesla, is facing some challenges related to the production of the Model 3. This is also putting financial pressure on the company with a fast-growing debt. The manufacturer of electric vehicles also keeps bleeding money. Elon Musk, the CEO of the company, made comments on the problems and the Tesla stock fell five percent. The Model 3 is different from other electric vehicles because it has a more affordable price, so, in theory, it must become a car of massive consumption. According to a report by Fortune, the investors had already perceived that something was wrong with the company because it produced just 260 units of the Model 3 last quarter which is much less than the goal of 2,000.

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Musk keeps vigil on where the Model 3 is manufactured - the Gigafactory - observing the production process and all types of problems. One of the main challenges is related to the new type of battery that Tesla is building for the Model 3, which is far cheaper than the Model S and the Model X. The Model 3 is just $35,000 which should make it much more affordable for consumers but problems with a subcontractor have forced Tesla to start over and this is delaying production. Musk accepts all the responsibility for what is happening.

Production hell

Musk stated that the company had to write all the software again and that they have done 20 or even 30 man-years of software in four weeks for the battery module. Musk spends many nights at the Gigafactory working hard to fix the battery production, and this emotional pressure has had a mental cost for him.

The Tesla CEO has described this as production hell, which is in one of its worst stages.

According to a report by Fortune, Musk stated that they fell to the lowest levels. He believes that the company will be able to manufacture 5,000 units of Model 3 in March, but made no comments about manufacturing 10,000 units per week. This would be the ideal number for Tesla because at that level it would be able to make a profit.

Financial challenges

Although the revenues of Tesla were almost $3 billion the last quarter, the company lost more than $600 million because of production problems. According to a report by Bloomberg, the debt of the company has surpassed $3.3 billion, so, it has almost tripled since the start of the year. While the production levels remain low, the company headed by Musk faces serious financial problems. This is a key moment in the history of Tesla.