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Tesla’s Musk Takes Charge of Model 3 Production as Problems Persist

Tesla’s struggles to manufacture its flagship Model 3 electric sedan reached a boiling point last week, prompting CEO Elon Musk to take direct control of the division producing the vehicles, according to two people briefed on the matter.

The move came after Tesla failed to hit its goal of making about 500 Model 3 sedans per day, or 2,500 per week, by the end of March. Mr. Musk appears to have pushed aside the company’s senior vice president of engineering, Doug Field, who had been overseeing manufacturing in recent months. Until the move by Mr. Musk, Mr. Field had been consolidating power since joining Tesla from Apple in 2013. Mr. Musk had given Mr. Field several chances to raise output, but the company has repeatedly missed its Model 3 production targets over the past year, including after Mr. Field took over manufacturing.

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Tesla, whose valuation is just shy of Ford and was ahead of General Motors in February before Tesla’s stock began to take a hit, is one of the most controversial stocks on the market. Close to 30% of Tesla’s available shares, known as the float, have been borrowed by short sellers who believe the stock price will fall, according to Yahoo Finance. (Mr. Musk owns around 20% of the company.) Investors who are bullish on Tesla compare it with other hotly debated growth stocks such as Amazon and Netflix. But those companies arguably have more control over their costs than a maker of complex hardware that must be safe enough to carry humans. And Tesla might not be able to tap the debt markets forever.

Aaron Wall and Justin Gerard commented on this article.
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The move by Mr. Musk capped a tumultuous week at the upstart car maker.