Tesla to Temporarily Halt Factory as Model 3 Pre-production Looms
Tesla is planning to halt vehicle production for one week in February to prepare for Model 3 pre-production, which the company says will begin February 20.
According to Reuters, the short-term shutdown of its Fremont, California assembly plant will give Tesla time to add capacity to its paint shop as it plans for full-scale production of the Model 3.
“This will allow Tesla to begin Model 3 production later this year as planned and enable us to start the ramp towards 500,000 vehicles annually in 2018,” said a Tesla spokesperson.
This sounds like Tesla is on track, or at least close, to meeting its Model 3 production goal.
According to Tesla, suppliers not meeting their own deadlines is the only variable that might delay production of the massively pre-ordered EV.
As we already know, the Model 3 will not be available with the 100 kilowatt-hour battery found in the Model S, and it’s likely Tesla will use the cheaper 60 kWh battery already offered in that model.
At $35,000 before any tax incentives, the Model 3 would be the least expensive vehicle to roll out of Fremont. That would also make it cheaper than the Chevrolet Bolt, its main competition, which carries a $37,495 price tag before tax credits. While some have said that the Model 3 will not be profitable at that price, the Bolt doesn’t break even, either.
It’s unknown how many pre-production Model 3s the company plans to build during this phase of the ramp-up. Tesla also expects to perform general maintenance during the downtime.
[Images: Tesla Motors]
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"and it’s likely Tesla will use the cheaper 60 kWh battery already offered in that model." The Model 3 will use a unique battery from the Model S, constructed from larger, 21700 size cells (Model S uses 18650 size). . .
Is the stoppage also possibly an indicator that sales have slowed on the Model S and X? If sales of existing models are slowing down, it might be an early indicator that that model 3 will cannibalize sales of the S with its substantially lower price and more manageable size. Thus a key question is how much such possible cannibalization will hurt Tesla current financial situation - will the Model 3 be an even bigger money loser than the S?