Tesla CEO Elon Musk has clarified the situation around the production ramp-up of the new base Model 3 – saying that the vehicle won’t reach volume production until mid-year’.
When Tesla launched the new base $35,000 Model 3 with standard battery pack last week, it shocked quite a few since Musk had recently been guiding a launch in another 4-6 months.
Yet, the automaker said that reservation holders could get the car within 4 weeks.
While this is apparently still true, Musk is now clarifying that this is part of another production ramp up and volume production of the new version of the Model 3 is not expected to happen for another few months:
Gap in understanding is that $35k Model 3 production *starts* this month, but will not reach volume production until mid year. Extremely difficult to predict middle part of manufacturing S-curve.
— Elon Musk (@elonmusk) March 4, 2019
Tesla started taking orders for the $35,000 Model 3 last week and the CEO said they will prioritize reservation holders who were waiting for the base version.
Until now, Tesla has been producing between 4,000 and 5,000 Model 3 vehicles per week, but the automaker is targeting raising the capacity to 7,000 per week in Fremont and an additional 3,000 per week in China by the end of the year.
That makes more sense. I assume production of the new version is going to be fairly low in the coming months.
After all, they have been presenting the base Model 3 has been dependent on Tesla slashing its retail costs and as we reported last weekend, Musk admitted that they are just starting a review of the operations that will last for a few weeks.
Actual meaningful savings probably won’t happen for a few months – when Tesla is going to start producing the $35,000 Model 3 in volume.
With the increasing numbers of options now available for Model 3, I am starting to be curious about the mix of sales – especially when it comes to the battery packs.
Before launching the Model 3, Musk estimated the average sale price at around $42,000 once all options would be available.
I am not sure if that turned out to be accurate.
What do you think? Let us know in the comment section below.
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