Tesla has pledged to hit a production target of 5,000 Model 3s every week by the end of 2017 and even plans to increase that to 10,000 a week at some point in 2018. While a massive increase over its traditional production levels, it will be necessary, as Tesla has taken deposits for several hundred thousand Model 3s, on top of its trickle of sales for its more expensive models.
When Tesla debuted its Model 3, no one was quite sure how successful the much-more-affordable electric car would be. Priced at $35,000 before government subsidies, the car saw a massive interest from the public, with hundreds waiting in line to put their orders in at various Tesla stores. In the end, over 325,000 were ordered within the first week. The only problem though, is that up until that point Tesla had only shipped 50,000 cars in the entirety of 2015.
With a close of 2017 launch date for the Model 3, Tesla had its work cut out for it, which is why it’s been ramping up production since. It shipped close to 25,000 cars in the third quarter of 2016 alone, but will need to go further if it wants to not keep Model 3 customers waiting.
Tesla’s Model 3 could be the first high-performance electric car to go mainstream, with a much more affordable price tag.
Tesla has now outlined that plan and has promised to ship out 5,000 cars a week at some point in the fourth quarter of 2017. The goal is to then reach a point where it can manufacture and ship 500,000 cars in 2018, with capacity only increasing from there as its Gigafactory 1 hits maximum production for batteries, motors and drivetrains.
To achieve this goal, Tesla may take on additional external investment. While CEO Elon Musk said recently that it would be possible to self-fund the ramping up of production, it would take the company a little too “close to the edge.” He told investors during a conference call that Tesla will invest as much as $2.5 billion in capital expenses before the Model 3 launches and has around $3.4 billion on hand (as per Reuters).
With that in mind, Tesla believes that it would be prudent to reduce risk by taking on additional investment.
Regardless of investment though, with Model 3 limited production not set to begin until July, it’s unlikely that Tesla will have all of the Model 3s ready for launch, though it should be able to fulfil the majority of them in early 2018.
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KitGuru Says: Tesla vehicles have always taken a little while to arrive when ordered, but as the popularity of the company’s vehicles increases, its production looks set to hit new highs.