Billionaire CEO Elon Musk announced on Twitter this morning that Tesla, Inc. will be dropping two of its premium color options in order to streamline manufacturing.
According to Reuters, the car company only offers seven colors (Obsidian Black, Metallic Silver, Solid Black, Midnight Silver Metallic, Deep Blue Metallic, Pearl White Multi-Coat, and Red Multi-Coat), so dropping two colors from standard manufacturing amounts to a reduction in color choice by nearly a third. Repair facilities will continue to stock all colors, and Musk notes that Obsidian Black and Metallic Silver will still be available by special request at a premium. Nearly all of Tesla’s color choices are options anyway; per CNN, the only color buyers don’t have to pay extra for is Solid Black.
Tesla has been on a bit of a roller coaster this year, partially due to a production shortfall of its Model 3 sedan, the company’s car for the masses. The Model 3 is smaller and less expensive than the other two products currently in the Tesla lineup, the Model S and Model X, and the company is betting its future on being able to pump out as many as 6,000 Model 3s per week to meet demand. Currently, Tesla is only making about 5,000 per week, and it didn’t reach that number until July, much later than Musk originally planned. Taking the most labor-intensive paint options out of the mix is an attempt to speed up production, though it remains to be seen how much it will help.
The other factor contributing to Tesla’s ups and downs this year has been Musk himself. In just the last couple of months, he has been seen smoking marijuana on Joe Rogan’s podcast, got into a Twitter war with a pop star, threatened to create his own media empire to avoid criticism from the press, falsely accused a British rescue diver of being a pedophile, and spontaneously announced plans on Twitter to take the company private at $420 per share, a violation of Securities and Exchange Commission laws. A number of lawsuits have sprung up surrounding these events, increasing Musk’s already high stress load from his claimed 120-hour work weeks. Since the privatization announcement in early August, Tesla shares have dropped an astonishing 29 percent, and are currently hovering around $275, a far cry from the nearly $400 share price before Musk’s announcement. On Tuesday, brokerage Nomura Instinet downgraded Tesla stock from neutral to buy status, citing Musk’s “erratic behavior” as the reason.
Tesla, Inc. trades on NASDAQ under the ticker symbol TSLA.O.
