Tesla suspends Model 3 production: Elon Musk wants automation fix

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Elon Musk will sleep at Tesla to oversee Model 3 production.
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Tesla eased off the accelerator in manufacturing its new mass-market electric car as the company faces questions over its ability to make new vehicles in large quantities.

The company has temporarily suspended production of the Model 3 as it remains challenged by problems on the assembly line at its plant in Fremont, Calif.

It’s at least the second time in recent weeks that production has been halted. This time, Tesla said it made the move “to improve automation and systematically address bottlenecks in order to increase production rates.”

The latest hiccup comes after Tesla surprised investors with a rapid improvement in production pace at the end of March, when its output hit 2,000 vehicles per week.

Some ndustry experts have suggested that CEO Elon Musk’s ambition to adopt advanced automation on the assembly line was misplaced.

“Yes, excessive automation at Tesla was a mistake. To be precise, my mistake. Humans are underrated,” Musk said last week on Twitter.

The company declined to say how long production would be stalled but said it’s “not unusual” and “our Model 3 production plan includes periods of planned downtime.”

Musk himself recently took over Model 3 production, repeating a pattern in which he has personally taken responsibility for troubled operations at his companies.

The latest production suspension is cause for concern, Evercore ISI analyst Arndt Ellinghorst said in a note.

More: Can Elon Musk avoid the fate of John DeLorean? Tesla CEO may need to ‘rethink’ strategy

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More: Tesla CEO Elon Musk: We got ‘complacent’ but Model 3 output is accelerating

“While temporary suspensions to production, in order to improve manufacturing engineering/line rates, are not uncommon in the auto industry, particularly during a ramp-up, we believe that the news will once more be taken negatively by the market; providing more honey to the bears,” he said.

Tesla’s stock fell 1.5% to $286.48 shortly after the opening bell Tuesday.

The company also got some good news as China announced plans to lift foreign ownership restrictions on local manufacturing plants. Tesla has been planning to build a plant in China.

Follow USA TODAY reporter Nathan Bomey on Twitter @NathanBomey.

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