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Tesla Still Facing Ups and Downs as Auto Industry Watches

California automaker Tesla stirs up controversy and generates a lot of interest from fans as well as critics. Recent events make the future of the company look a little uncertain. Naturally, critics like Bob Lutz (the former GM executive) are foretelling Tesla’s doom, while fans say this is a consequence of making the most revolutionary cars ever.

The Tesla Model 3.

To really understand what’s going on with Tesla right now, you need to know about the following recent news items:

Production Ups and Downs

The biggest, most important story for Tesla is the Model 3, which hundreds of thousands got in line to buy, and how quickly it can make the cars. There’s considerable media spin about Model 3 production, with electric car fanboy sites always highlighting when Tesla sees a surge, and more traditionalist sites focusing inordinately on assembly line hiccups.

Instead of just looking at snapshots, I like to check the Bloomberg Tesla Model 3 Tracker. It uses Tesla’s reporting, plus estimates production using a combination of sources.

Honestly, production volume is up and down. While it surpassed 6,000 units a few weeks ago, the latest estimate pegs it at 3,104 cars. Those are some wild fluctuations.

Bloomberg estimates just over 91,000 Model 3s have been made so far. That’s good, but there are many people waiting for their car. What’s more, the prediction is that the current production figures will slump slightly for a couple of weeks or so.

What’s been trying up production when it’s low? Well, there’s the fact that the majority of the Model 3s that were built in the last week of June, which was the first time Tesla hit the 5,000 units in a week metric, had to be reworked. Most didn’t have big issues, taking about half an hour to correct, but that pulled resources from producing new cars.

Another holdup has been paint, specifically multi-coat colors like Red and Pearl White. The problem has become so big the automaker is even suspending production of cars in those more complex colors. Tesla also increased the price of the Red paint option to $2,500 and has stopped offering other options entirely.

Even if Tesla is churning out tons of cars, getting those vehicles to buyers is proving challenging. One woman took a picture of hers and many other Model 3s sitting behind a chain link fence at the local railroad yard, where they apparently had been for many days, posting it to Twitter. She and many other wannabe Model 3 owners are upset that after waiting so long to get their car, the delivery process has been inexplicably long.

Gone in Seconds

As long as there are cars, there will be car theft. If you think buying a Tesla will insulate you from the risks, thanks to sophisticated tech and over-the-air updates, that might not be true.

Researchers from the Computer Security and Industrial Cryptography, a group based out of the University of Leuven, Belgium, were able to successfully hack a Tesla Model S key fobs in seconds. The researchers attacked and cloned the fobs, giving them access to the cars and allowing them to drive off without problems. What’s more, the security hole allows hackers to gain access when they’re not even close to the car.

Demonstrations are fine, but the real thing is even scarier. A rental Model 3 in the parking lot of the Mall of America was stolen by a 21-year-old who was later caught in Waco, Texas. Reportedly, the thief called Tesla’s customer support line and added the Model 3 to his account by providing the VIN. From there he used the Tesla app on his phone to get in and start the car. A new PIN-to-drive function hopefully will prevent this kind of incident in the future.

Up in Smoke

Oh, and then there’s the whole Elon Musk interview with Joe Rogan. As it should be expected, the interview was edgy and strange. Things take an unexpected turn when Elon Musk smoked a joint on the air, although only momentarily, commenting that it’s legal in California.

Stock holders didn’t like that, and Tesla share values slid the morning after. Tesla’s chief accounting officer and head of HR both departed about the same time, really making investors jittery. The fact that Dave Morton, the chief accounting officer, had been with Tesla for under a month really didn’t look good.

And speaking of dreams going up in smoke, the Saudis won’t be investing in Tesla. Instead, rival Californian electric automaker Lucid announced the Saudis will be investing over $1 billion in their company. That means the Lucid Air is finally going to hit the market in 2020. This means another competitor for Tesla, and one that’s well-funded. Also, Tesla is presumably still under investigation for Elon Musk’s tweet about taking the company private. We’ll see if anything comes of that.

Paying a Premium

Thanks to outrageously expensive bodywork, the Tesla Model 3 has an insurance cost that’s getting close to a Porsche 911’s. Gabi Personal Insurance Agency concluded that the average monthly insurance cost for a Model 3 comes to almost $235, while a 911 costs about $237 a month. Ridiculous? Absolutely, especially considering a Chevrolet Volt that sold for about the same price costs about 75 percent as much as a Model 3. What’s more, the Model S and Model X have insurance costs that almost equal the Audi R8, which is a supercar.

What’s the reason for sky-high insurance? Expensive replacement components for Teslas, plus premium prices from Tesla-friendly body shops.

Elon Musk recently said he’s looking into reworking the body shop situation. A third factor that really ruffles Tesla’s feathers is the highly publicized Autopilot crashes, including one in Utah where a Model S plowed right into the back of a parked fire truck with its lights on. That Tesla owner is suing the automaker.


There have been rumblings lately that Elon Musk will be replaced as CEO. Apparently, the adults inside Tesla feel he’s damaging the company’s image. Considering some of his recent behaviors, that’s not an unreasonable assessment. As the automaker moves more mainstream, something will need to change.

Discuss Tesla, and other automobile industry trends, in our new GrabaCAD Groups forum.

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