Tesla Model 3's Design Isn't Finalized; Musk Flings Cash to Kick-Start Production
At the Tesla Model 3’s glitzy unveiling, everyone knew the model was a half-baked cake. Now, company founder Elon Musk admits the much-hyped electric sedan still isn’t out of the oven.
Musk said in a recent conference call that the design of the $35,000 Model 3 EV still isn’t finalized, according to Reuters, and the company plans a spending spree to get the model into production on time.
Tesla already has around 400,000 reservations for the lower-priced, 215-mile EV, and plans to begin production in late 2017. Last week, Musk took to Twitter to warn prospective buyers that a delayed order could mean delivery in 2019, despite plans to produce between 100,000 and 200,000 Model 3s before the end of next year.
Achieving a factory output of 500,000 Teslas (all models) in 2018 won’t be cheap, but first the company needs to nail down supplier issues and finalize a design for its mass-market wonder car.
Musk said in the conference call that Model 3 engineering decisions will continue for another six to nine weeks before the model reaches its final design. At the same time, the company is evaluating and selecting suppliers.
Barclays analyst Brian Johnson told Reuters that Musk’s timeline for production, given the groundwork needed, “seems not possible.”
Whether or not that’s true, avoiding the supply issues that delayed Model X production (and led to quality issues) is key to the model’s success, given the anticipated delivery dates for many Model 3 buyers. Musk doesn’t want to start handing back $1,000 deposits as nervous would-be buyers get cold feet.
A delay would damage the company’s brand and send some EV buyers into the waiting arms of General Motors, Nissan, and other electric car producers.
Tesla kept spending low for the first quarter of this year, but the company expects to shell out $2 billion over the rest of the year to boost production capability. One quarter of that cash will be sunk into Tesla’s Nevada Gigafactory, which will supply the Model 3’s batteries.
[Image: Tesla Motors]
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@Quentin: (Ran out of reply options above ^^^)... If Tesla reneges on the $35k Model 3, attempting a bait-and-switch for reservation-holders like me, I'll ask for a refund. While I do expect to be drawn in for a couple of options, I WILL NOT buy a $45-50k car. I'm guessing that many others would agree and do the same. It's not that the Model 3 won't be a good car at a higher price, it just won't be affordable. The Model 3's performance and visual appeal are givens. But Tesla's entire future depends on this car's affordability and profitability.
Good critical 2-page summary of Tesla's ability to hit its goal of producing 500k cars (all models) by the end of 2018: http://www.greencarreports.com/news/1103860_tesla-says-it-will-build-500k-cars-a-year-by-end-of-2018-can-it