Since Tesla (NASDAQ:TSLA) CEO Elon Musk revealed earlier this month he was considering taking the company private at $420 per share, the media narrative about the electric-car maker has shifted. Specifically, headlines about whether the company could live up to ambitious production targets have mostly faded into the rearview mirror as the media debates whether or not Tesla could go private.
But there's more behind the shift in headlines than the fact that there's a new narrative to cover. Another reason is simply that there are good signs Tesla's production is finally firing on all cylinders. For instance, Bloomberg's Model 3 production tracker now estimates that Model 3 production has surpassed a rate of 6,000 units per week.
As the media scrutinizes Tesla's potential privatization, is the automaker's Model 3 production quietly skyrocketing?
Rising Model 3 production
Bloomberg's Model 3 tracker, which its website says "relies on data from official U.S. government resources, social media reports, and direct communication with Tesla owners," estimates Tesla has now achieved a Model 3 production rate of 6,278 units per week.
If this is true, it would be a notable accomplishment. After falling six months behind its initial Model 3 production ramp-up targets, the automaker has mostly achieved its revised production forecasts made at the beginning of 2018.
Tesla importantly hit a production rate of 5,000 units per week for its Model 3 at the end of its second quarter. Even more, Tesla managed to do this while sustaining a combined production rate for its Model S and X of nearly 2,000 vehicles per week. Furthermore, in Tesla's second-quarter shareholder letter on Aug. 1, management said it repeated these weekly production levels "multiple times" in the month of July.
Giving investors a new target, Tesla said in its second-quarter update it expected Model 3 production to rise to 6,000 units per week by late August. Bloomberg's Model 3 production estimates suggest Tesla actually pulled this off. On a similar note, an analyst last week who visited Tesla's factory said he suspects Model 3 production is faring well.
If Tesla really has achieved a sustainable Model 3 production rate above 5,000 units per week, profitability could be on deck for the company's third quarter. In Tesla's second-quarter update, management said it expected to be profitable in both Q3 and Q4. But this was contingent on building and delivering around 5,000 Model 3 units per week while maintaining current levels of Model S and X production.
Of course, nothing is certain until Tesla releases its actual Model 3 production and delivery numbers. Tesla does this within a few days after every quarter ends, so its next update on vehicle production and deliveries will come in the first few days of October.