Tesla’s Record Breaking Delivery Rate is Great for the Model 3

Getty Images / Justin Sullivan

Tesla is well on its way to achieving its ambitious goals for Model 3 production. On Sunday, the company revealed that it broke delivery and production records in the first quarter of 2017, which is great news for Tesla’s forthcoming $35,000 vehicle, expected to go into production in July.

In the quarter, Tesla delivered around 25,000 vehicles: 13,450 Model S cars and 11,550 Model X’s. That’s a 69 percent increase when compared to the first quarter of 2016. The company also produced 25,418 vehicles in Q1 alone, another record-setting result for Tesla.

The stats are impressive, but they only represent a fifth of the output Tesla wants to achieve by the end of 2018. The company is pushing for an annual production rate of 500,000 cars: if its performance from this quarter was repeated over the coming year, it would fall short of this figure by nearly 400,000 cars.

Of the projected 500,000 cars produced per year, it is expected that half of these will be Model 3 vehicles. That leaves 250,000 Model S and X vehicles to make. The company is currently 40 percent of the way toward hitting its target with these two models.

Elon Musk introducing the Model X in September 2015. The car now accounts for almost half of the company's deliveries.

Getty Images / Justin Sullivan

Tesla has plenty of time to boost production rates, and there’s reason to believe it could still reach those targets.

For starters, the Model 3 features a much simpler design than its predecessors. The car has just 1.5 kilometers of cabling, where the Model S has three kilometers. The company is hoping that the lessons learned from building more complex cars will help increase the production rate of the simpler model.

The Gigafactory, parts of which are still under construction, should help the company boost total production capacity. When complete, the Nevada factory will produce batteries faster than the rate of bullets from a machine gun. In terms of sheer size, at 5.8 million square feet, the factory is expected to be the biggest building in the world.

It’s also notable that over the past year Tesla has managed to ramp up production at an impressive rate.

Tesla has a large backlog of orders to fill. Around 400,000 people have placed a reservation for the car, and new orders placed now are expected to be fulfilled by mid-2018. If it can continue to set records and increase production, it’s possible the company can reach its goals and switch to a more mass market model.