Elon Musk rebrands Tesla Model 3 delays as a 'time shift'

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A Tesla Inc. Model 3 stands on display during AutoMobility LA ahead of the Los Angeles Auto Show in Los Angeles, on Nov. 30, 2017.
A Tesla Inc. Model 3 stands on display during AutoMobility LA ahead of the Los Angeles Auto Show in Los Angeles, on Nov. 30, 2017. Credit: Patrick T. Fallon/Bloomberg

Don't call Tesla Inc.'s slower-than-anticipated deliveries of Model 3 sedans a delay. It's merely been a "time shift," according to Elon Musk.

"You'll definitely get your car," the CEO told CBS in an interview aired Thursday. "It's a six- to nine-month time shift. That's literally it, and three of those months have already passed."

Musk has tested some customers' and investors' patience by struggling to resolve bottlenecks causing what he's described as "production hell." The period of manufacturing woes is lasting about two to three quarters longer than he thought, he said.

The comments by Musk, 46, were somewhat inconsistent with Tesla's statement earlier this month, in which the company said Model 3 may exceed the growth rate that Ford Motor Co. exhibited with the Model T. Tesla shares fell as much as 2.4 percent and were down 1.7 percent to $295.85 as of 10:36 a.m. in New York.

To be sure, Musk also reiterated that the company was making progress. "As long as you can see that you're ascending levels of hell, that's OK," he told CBS. "Then at least that gives you hope. And I think we're rapidly—Tesla's rapidly on its way out of production hell."

Canceled reservations

Asked by CBS This Morning co-host Gayle King if Model 3 depositors were canceling their reservations, Musk said that some had.

"It's mostly, like, people cancel because, you know, they just needed a car and we didn't have a car for them," he said. As of the end of 2017, Tesla reported more than $850 million in customer deposits, including for the Model 3.

Tesla delivered 8,180 Model 3s in the first three months of the year, missing analysts' average estimate for about 8,800 units. The company built 2,020 of the sedans in the seven days leading up to April 3, below its target for a 2,500-unit rate in the final week of March.

The company has said the production rate for Model 3 will increase through the second quarter and that it will make 5,000 units a week in about three months.

Musk reiterated that he's again sleeping on the factory floor, as he did in 2016 when Tesla was struggling to produce the Model X crossover.

The billionaire said he's doing this "not because I think that's a fun place to sleep. I don't believe like people should be experiencing hardship while the CEO is like off on vacation."

-- Bloomberg News

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