The big Tesla news this week has been the Security and Exchange Commission's lawsuit against Elon Musk and the settlement they just reached in which Musk will pay a $20 million fine and step down as Tesla chairman for three years, although he will remain CEO.
That very big piece of bad news may have distracted some observers from a very big piece of good news. According to the electric vehicle news site Electrek, which says it's been tracking production, Tesla reached its ambitious goal of building 50,000 Model 3 vehicles during its third quarter of 2018. In fact, it beat that seemingly unreachable goal with two days to spare, producing 51,000 cars by September 28.
Of course, this is not an official number. It normally takes weeks for Tesla to release reverified production numbers, and given that the company's board now needs to find two new outside directors and put a new chair in place to comply with its SEC settlement, it might be even longer this time. Still, Electrek's preliminary count is likely pretty accurate.
Assuming it is, these production numbers are actually the biggest news about the company this week, at least in terms of its long-term prospects. Musk may not be chairman anymore, but he will still be around as CEO, and Tesla will still be very much his company. But hitting these production targets is a must for the company to become profitable, and sustainable for years to come.
The question is, will it be enough to make Tesla profitable? Tesla claims that it will be, and that it won't need to raise any more money for the moment, while observers predict that it will need to. If that's true, hitting these Model 3 production targets should make it much easier for the company to raise that money at more favorable terms.
Musk and Tesla have been doing everything they can to get and keep the company at a higher production capacity. For example, Tesla reduced the number of available colors for the Model 3, removing Obsidian Black and Metallic Silver from the menu, so that they'll only be available via special order. The New York Times, which followed Musk around for a day, described him working late into the night on the factory floor at the company's Fremont, California facility, fixing malfunctioning robots and rewriting manufacturing software in order to speed production. In an interview with the Times, Musk described spending nearly all his time in the factory and apparently he often sleeps under his desk, prompting some warnings about work-life balance from friends, including Arianna Huffington.
Now, just as all this over-the-top effort is paying off, Musk faces the humiliation of being ousted as Tesla's chairman for the next three years, and also having Tesla's board attempt to control his communications, another requirement of his settlement with the SEC. If Electrek's numbers turn out to be accurate, he has a lot to be proud of, and even happy about. It just may be that the company he's worked so hard to build will be around for a long time to come.