Tesla put an assembly line in a tent to reach its Model 3 goal of producing 5,000 sedans in a week and, while the company achieved this feat on Sunday, analysts feel the move could be detrimental to the company's reputation, Business Insider reported.
To meet its Model 3 production goal, Tesla hastily set up a tent with an extra assembly line next to its main factory in Fremont, California.
Company CEO, Elon Musk, took to social media to celebrate achieving the 5,000-per-week target Sunday, tweeting that Tesla had produced 7,000 vehicles in a week, including Model S and X vehicles, Tech Crunch noted.
And while Tesla boasted Monday that it had produced over 28,000 Model 3s in the second quarter, a number that was over three times more than the previous quarter, analysts are skeptical about how the low-tech tented factory will affect the company's long-term hi-tech reputation.
George Galliers, an analyst at Evercore ISI, said in a note to clients sent out Tuesday that, while he saw the business sense in pushing out mass production, he wondered about the possible downside to the move.
"The company should have waited rather than incur incremental capex to erect what appears to be a fairly primitive, and potentially temporary, facility," he said, according to Business Insider. "A facility which also has the potential to damage Tesla's reputation as an innovative and advanced manufacturer, in the eyes of the consumer."
Galliers also felt that Tesla would not be able to sustain the 5,000 per week production rate.
"We don't believe any investor sees 5k+ as a sustainable run-rate over the coming 3-4 weeks," Galliers writes.
"Based off the limited photographs/material available, does not appear cutting edge, modern or, ultimately, efficient to our eyes," he said. "Indeed, it looks like the set-up we would expect from an early start-up in an emerging market or in a developed market during a time of conflict."
Galliers said this seemed to go against "the very grain of Tesla's reputation as a technologically advanced company and the concept of 'the Machine that builds the Machine.'"
Tesla meanwhile said in a statement that the Model 3s constructed in its new general assembly line were on par with the quality of the regular factory's line.