Tesla, amid flak over Model 3 delays, buys automation company

Bad news from Tesla’s most recent earnings report knocked the company’s stock for a loop: a massive $619 million loss, combined with a revelation from CEO Elon Musk that the entry-level Model 3 sedan was behind schedule, were not what investors wanted to hear.

The company’s stock plummeted after the report, and as of the morning of Nov. 7, it was still down 27 percent from where it stood before Musk delivered the unwelcome insights.

Musk suggested that the Model 3 troubles would soon pass, saying its production is the most automated of any Tesla yet, which means challenges early in the production process.

Now, the Palo Alto electric car maker has acquired another automation asset, that could help get the Model 3 over the purported production hump.

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After keeping Minnesota firm Perbix, which designs and manufactures automation machinery, as a supplier for almost three years, Tesla bought the company, Bloomberg reported. The terms of the deal were not disclosed. Perbix president James Dudley is to receive about $10.5 million in Tesla stock, according to a regulatory filing, Bloomberg reported Nov. 6.

Tesla will expand its footprint in Minneapolis in the wake of the acquisition, a company spokesman told Bloomberg.

Fewer than 300 of Tesla’s much-hyped, $35,000 Model 3 sedans have been delivered so far. During the Nov. 1 earnings report, Musk told analysts that it would take his company months longer than announced to hit a 5,000-cars-per-week production target. Anyone ordering a Model 3 now would have to wait up to 18 months to receive it, the company has said.

Meanwhile, a major Tesla investor, China’s Tencent, has built its own automated driving system and even has a prototype, according to another Bloomberg report.

The Chinese firm, which owns the hugely popular WeChat app and bought 5 percent of Tesla in March, “intends to leverage its mapping and artificial intelligence technology to compete in a sector that’s attracted investment from the likes of Alphabet Inc.’s Waymo,” Bloomberg reported, citing anonymous sources.

 

Photo: Tesla CEO Elon Musk in 2013. (Nhat V. Meyer/Bay Area News Group)

 

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  • omegatalon

    One still has to wonder whether it’s a factory issue or if it’s the amount of money lost in selling each Tesla Model 3 that is preventing the company from building more vehicles.

 
 
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