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Tesla Model 3 ‘release candidates’ are currently being built – Musk notes ‘almost entirely built with production tooling’

We recently reported that Tesla disclosed being currently in the process of building Model 3 “beta prototypes” ahead of the start of production in July. We mentioned that they are cutting it close with just 4 months left before production, but we now learn that they are actually referring to those vehicles as “release candidates”.

Tesla CEO Elon Musk made the comment during a conference call with a select few investors earlier today. He commented in more details about Tesla’s plan for bringing the Model 3 to production. 

Yesterday, the automaker announced its intention to raise $1.15 billion in equity and debt to ‘reduce risk’ ahead of the Model 3 launch.

Musk and new again CFO Deepak Ahuja held a conference call with investors interested in the new capital raise and convertible notes this morning.

The call wasn’t made public, but an investor who participated gave Electrek a breakdown of the main points brought up by the two executives during the call.

Firstly, they addressed the size of the offering which some analysts bearish on Tesla’s stock, like UBS in a note this morning, see as too small to successfully bring the Model 3 to market.

Musk however thinks that the raise will be sufficient to bring the vehicle to “reasonable production levels”, but he also left the door open for raising more money this year. He sees an 80% chance of them not needing to raise any more debt or equity this year and if they end up needing more capital, they plan “a revolver or asset-backed line or warehouse line”.

In order to simplify the process of bringing the vehicle to production, they decided to limit the number of iterations. Following industry standards, they built pre-alpha show cars, alpha prototypes, beta prototypes and release candidates/pre-production cars for previous models like the Model S and X.

They took a different approach for the Model 3. Since the Model 3 was designed for manufacturability, they focused on building the tools for making the process more efficient and those tools are made to make production parts.

Musk says that the Model 3 prototypes that they are building now are “almost entirely built with production tooling”, which is why they are referring to the vehicles as “release candidates” instead of beta prototypes.

Based on the current results, the CEO added that the quality of release candidate build for the Model 3 is significantly higher than it was for the Model S or X. He added that they are “tightening the variance of parts” for better fit and finish, which was an issue for early Model S and X vehicles.

Finally, Musk said that they expect to be driving the release candidates “in a week or two”.

We were admittedly nervous about beta prototype production, which generally consists of almost hand-built prototypes made with parts manufactured with prototype tooling, only 4 months before the planned start of production. But if those vehicles are actually being made “almost entirely” on production machines, it’s reassuring.

As we recently reported, Tesla plans to start low-volume production of the Model 3 in July and ramp up to 5,000 units per week by the end of the year. The first vehicles will be reserved for Tesla and SpaceX employees. The company will then start working through its backlog of over 400,000 reservations holders – starting in California and then move to other markets.

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Avatar for Fred Lambert Fred Lambert

Fred is the Editor in Chief and Main Writer at Electrek.

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