Tesla buys automated machine maker amid production woes

Dana Hull
Bloomberg News

Tesla Inc. has acquired Perbix, a closely held maker of automated machines used for manufacturing, as the electric-car maker struggles to boost production of its most important new model.

Perbix has been a supplier to the automaker led by Elon Musk for almost three years, according to a Tesla spokesman, who declined to disclose the terms of the deal.

James Dudley, Perbix’s president, will receive about $10.5 million in Tesla stock, according to a regulatory filing.

Musk last week alluded to automation challenges as among the reasons the Model 3 sedan, which starts at $35,000, has gotten off to a bumpy start.

The chief executive officer pushed back a projection for when Tesla will make 5,000 of the cars per week by about three months, to the end of the first quarter of next year.

Tesla said in a filing last week it’ll wait until reaching that intermediate target before taking steps to boost weekly output to 10,000 units, allowing the company time to optimize its automation and conserve spending.

“With Model 3, either the machine works, or it doesn’t, or it’s limping along and we get short quite severely on output,” Musk said on an earnings call with analysts last week.

By contrast, with the Model S sedan or Model X sport utility vehicle, “because a lot less of it was automated, we could scale up labor hours and achieve a high level of production.”

Tesla will expand its presence in the Minneapolis area where Perbix is based, the spokesman said.

Tesla built only 260 Model 3 sedans in the third quarter, trailing its 1,500-unit forecast.