Tesla is reassessing their expectations for Model 3 units released in 2017. In an ideal scenario, around 80,000 electric vehicles would have been ready by the end of the calendar year. However, company CEO Elon Musk has given estimates that show they’ll be able to hit on about half of that figure.
Long-awaited production has started two weeks ahead of schedule, and the first Model 3 will be completed by the end of the week. The official launch event will happen on July 28th, so it’s expected to see these vehicles being delivered at that time. Based on a tweet by Musk, there will be 30 cars distributed at the end of the month.
Handover party for first 30 customer Model 3's on the 28th! Production grows exponentially, so Aug should be 100 cars and Sept above 1500.— Elon Musk (@elonmusk) July 3, 2017
Earlier this year, Tesla wanted to ship close to the six-figure mark in Model 3 units by 2018. An Electrek back in February took estimated parts orders from a company conference call and believed that with perfect execution, the company could build 80,000 units. However, that’s based solely on everything running smoothly, and even Musk admitted that’s never the case in the conference call.
“The rate of production is as fast as the slowest component in the vehicle. And when you have several thousand unique items, it can move as fast as the least likely and worst executing part of Tesla or our suppliers. That’s just the way it goes.”
That number has now gone down to around 40,000 Model 3 units. Musk shared on that deliveries of the electric vehicle in “[August] should be 100 cars and [September] above 1500.” If they’re able to hit their 5,000 units per week by December, they could reach that new plateau. They’ll be serving California first, then moving toward the East Coast, and it’s unknown how many units will make it past the West Coast at the moment.
Not reaching the halfway point of original estimates shouldn’t be looked at as a failure. While the 400,000 that reserved a Model 3 may be worried about when their vehicle will arrive, Tesla has been working on a streamlined way to produce these new cars. The company also has a history of overshooting its guidance. For example, they’re on pace to beat some analysts that didn’t expect them to hit by 2018.
If they can produce 20,000 units per month and build on that, they’ll significantly slice into their reservations by mid-2018, which is the current estimated time for people making new reservations. However, don’t expect to see those vehicles until later in the year, if not in 2019 unless production ramps up even further. Tesla’s Model 3 still hasn’t been given a price tag, but the starting price is expected to be $35,000 with minimal features. suggest that the average price will be closer to the $50,000 to $60,000 range.
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