Two Tesla executives leaving ahead of Model 3 ramp-up

Wed May 4, 2016 2:40pm EDT
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By Alexandria Sage

SAN FRANCISCO (Reuters) - Two top manufacturing executives are leaving Tesla Motors Inc (TSLA.O: Quote) as the Silicon Valley electric-car maker prepares to launch its first mass-market car, the Model 3, and sharply ramp up production.

The departures follow a rocky production start for the company's Model X sport utility vehicle, a technology-heavy crossover that faced problems including parts shortages and quality issues, such as non-fastening doors.

Tesla's vice president of production, Greg Reichow, has chosen to take a leave of absence for a "well-earned break," a Tesla spokesperson said. Chief Executive Elon Musk said Reichow and his team deserved credit for "building an all-new manufacturing organization from the ground up" and making the Model S sedan and Model X a reality.

Reichow, who has led production for the past three years and has been employed for five years at Tesla, will stay on until a successor is found to ensure a "smooth handoff," the company said.

Tesla also confirmed its vice president of manufacturing, Josh Ensign, has left the company.

Tesla says the Model X issues have been resolved and production of the SUV, which began deliveries in September, is now on track.

The company hopes to produce 500,000 vehicles annually by 2020, led by its hotly anticipated Model 3, which is to be priced around $35,000 and due to begin production at the end of 2017.

Some analysts question whether the company will be able to handle a ten-fold increase in production, given demand for the Model 3, which has already received more than 325,000 reservations in the month following its unveiling on March 31.   Continued...

A Tesla logo is painted on a wall inside of a Tesla dealership in New York, U.S., April 29, 2016. REUTERS/Lucas Jackson