×

Tesla is 'moving in a good direction' with shutdown, says investor Gene Munster

  • Tesla's move to shut down production of its Model 3 for six days is a "big deal" but it's not necessarily a bad thing, Gene Munster says.
  • "This manufacturing shutdown is evidence that things are moving in a good direction," he says.
  • Munster is also not concerned about the recent management shake-up at Tesla.

Tesla's move to shut down production of its Model 3 for six days is a "big deal" but it's not necessarily a bad thing, tech analyst-turned-venture capitalist Gene Munster told CNBC on Tuesday.

The electric car maker plans to pause production at its California factory at the end of May to work on fixes to its assembly line, sources inside the company told Reuters.

"This manufacturing shutdown is evidence that things are moving in a good direction," Munster said on "Closing Bell."

A Tesla Model 3 car is on display during the Auto China 2018 at China International Exhibition Center on April 25, 2018 in Beijing, China.
VCG/VCG | Getty Images
A Tesla Model 3 car is on display during the Auto China 2018 at China International Exhibition Center on April 25, 2018 in Beijing, China.


Tesla had previously warned of 10 days of temporary shutdowns this quarter to address issues that have delayed volume production of its new Model 3 sedan.

Munster, managing partner at venture capital firm Loup Ventures, said that Tesla's desire to re-engineer the manufacturing process requires the shutdown. However, Munster said he is "delighted" about the new technology it plans to implement, which he called "a whole new paradigm around manufacturing."

Meanwhile, Munster also is not concerned about the recent management shake-up at Tesla.

On Monday, CEO Elon Musk told employees that the company plans to "flatten" its structure as it works to improve communication and trim activities "that are not vital" to its success.

"Elon Musk has been very deliberate at stepping in and taking more control of company in the last few weeks," Munster said, pointing out that Musk sees the next three months as a "critical window" for Tesla's success.

"I'm comfortable that they are moving things in a good direction," he said.

— CNBC's Robert Ferris and Reuters contributed to this report.