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Tesla Achieves a Key Weekly Goal for Producing Its Model 3

Tesla workers on a Model 3 assembly line in Fremont.Credit...Justin Kaneps for The New York Times

Tesla says it has reached a manufacturing milestone, producing more than 5,000 Model 3 sedans in a week. Now the electric-car maker must prove it’s not a one-time achievement.

The company is counting on the Model 3, its first mass-market vehicle, to increase revenue and offset the billions of dollars it has been spending to set up a huge battery plant in Nevada and begin making the Model 3 at its car plant in Fremont, Calif., as well as to develop new vehicles.

[Read more: To reach its production goal, Tesla started building cars under a tent, and it says Elon Musk slept at the factory.]

In a regulatory filing on Monday, the company said it was also feeling pressure from a weaker dollar, and could see further strains stemming from the Trump administration’s trade policy. Higher tariffs could increase the prices of cars exported to China and components that Tesla imports from that country.

For now, however, the automaker is celebrating. Tesla said it produced more than 5,000 Model 3 sedans in the last seven days of June, a goal that its chief executive, Elon Musk, has said is crucial to its bid to turn a profit in this year’s final two quarters.

“We either found a way or, by will and inventiveness, created entirely new solutions that were thought impossible,” Mr. Musk told employees Sunday in an email, adding, “I think we just became a real car company.”

Investors initially reacted favorably to the production report, sending Tesla shares up in morning trading, but the stock finished the day more than 2 percent lower at $335.07.

The automaker also reported the departure of Doug Field, a senior executive it had hired away from Apple in 2013 to oversee vehicle development and later named senior vice president for engineering. Tesla said in May that Mr. Field was taking time off but had not left the company.

Tesla has been struggling with bottlenecks and other glitches in its Model 3 assembly process. Mr. Musk had once foreseen making 20,000 Model 3s a month by last December, but in the entire fourth quarter Tesla produced fewer than 2,500. Since then it has refrained from making annual projections for the vehicle.

The company has streamlined its production line by replacing complicated robotic machinery with human workers. In June, Tesla erected a giant tent just outside the walls of the Fremont plant, where it cobbled together a new production line to hasten final assembly of the cars.

The assembly problems had mostly plagued two Model 3 final assembly lines Tesla has set up inside the plant, although there were also production slowdowns in the paint shop.

With the three assembly lines running, Tesla built 5,031 Model 3s in the final seven days of June; about 20 percent came from the line set up in the tent outside the plant. It also made nearly 2,000 other vehicles — the Model S luxury sedan and the Model X sport-utility vehicle.

Tesla’s challenge is to prove that it can produce more than 5,000 Model 3s week after week. A company spokesman said Tesla had to operate the assembly line 24 hours a day to reach the seven-day total.

Automakers typically cannot run plants around the clock for long periods because they need to stop production to maintain the machinery. Workers also become fatigued if required to work six or seven days a week. Nonetheless, Tesla said it expected to produce 6,000 Model 3s a week by late next month.

“I don’t know if the numbers really represent reality or sustainability,” said Karl Brauer, a senior analyst at Kelley Blue Book, an automotive research firm. “You have to keep a critical eye on them. There is a history with Tesla, and we’ve been told a lot of things about Model 3 targets in the last year that haven’t proven accurate.”

The company has never reported an annual profit in the 15 years since its founding. In the first quarter, Tesla recorded a loss of $785 million on revenue of $3.4 billion. And the company consumed $745 million in cash, up sharply from $112 million in the previous quarter.

Alarmed by both the cash burn and the lagging increase in assembling Model 3s, Moody’s Investors Service cut Tesla’s credit rating in March.

In the second quarter, Tesla produced 28,578 Model 3s, about three times as many as in the first quarter, the company said. Output for the Model S and Model X totaled 24,761 combined. The overall output of 53,339 was a 55 percent jump from the first quarter.

Tesla delivered just 18,440 Model 3s to customers in the quarter, and 11,166 were in transit, a result of having increased production so late in the quarter. Combined deliveries for the Model S and X came to 22,300 vehicles.

Tesla has delivered 28,386 Model 3s to date and has reservations for approximately 420,000.

A version of this article appears in print on  , Section B, Page 3 of the New York edition with the headline: Tesla Meets Its 5,000-a-Week Goal. Now, Repeat Next Week.. Order Reprints | Today’s Paper | Subscribe

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