Tesla Model 3: Elon Musk Explains Why $35,000 Car May Have a Long Wait
The $35,000 Tesla Model 3 is here, but with a key caveat. CEO Elon Musk explained on Monday that the company’s cheapest-ever electric vehicle, which launched last week and made good on a key Tesla promise, may take a while to reach consumers as production gradually increases.
Musk explained on Twitter that the “gap in understanding is that $35k Model 3 production starts this month, but will not reach volume production until mid year,” adding that it’s “extremely difficult to predict middle part of manufacturing S-curve.” The issue will be familiar to anyone who held a $1,000 reservation before the Model 3 entered production in July 2017, as Tesla spent the subsequent months aggressively scrambling to meet consumer demand while boosting production. The company initially expected to produce 2,000 cars per week by December 2017, only to produce on average 202 cars per week in the fourth quarter. Tesla eventually met its goal in July 2018.
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Tesla announced the $35,000 car last month to great fanfare, as part of the company’s grand strategy to reach more consumers. It offers 220 miles of range, acceleration from 0 to 60 mph in 5.6 seconds, a top speed of 130 mph, and a more basic interior that drops add-ons like a smartphone dock. Like all current Teslas, it comes with the necessary cameras and sensors to one day support full autonomous driving.
The issue stems from a broader problem with predicting manufacturing speeds. When discussing the upcoming Model Y compact SUV with investors in a February 2019 earnings call, Musk noted that it “always takes time to ramp up any production system, and that’s difficult to predict the shape of that S-curve.” Tesla is currently building a new Gigafactory in China to build affordable cars without needing to import, which could help boost production faster than the initial Model 3 ramp-up two years prior.
Tesla plans to unveil the Model Y at the Los Angeles Design Studio on March 14. The event is set to offer “detailed specs and pricing” of the vehicle, expect to cost 10 percent more than the Model 3 while measuring 10 percent larger and offering decreased range.
The company is also planning to launch new vehicles like a pickup truck, second-generation Roadster, and Semi electric truck. With all these moving parts, Tesla may face a large number of S-curves over the coming years.