First Tesla Model 3 Built This Week, Deliveries Start This Month ""
Posted on: July 4, 2017

2017 Tesla Model 3

All the Tesla naysayers who’ve accused the electric-vehicle maker’s mass-market compact sedan, the Model 3, of being vaporware—or who’ve predicted that it will be vastly more expensive or arrive late to market—now have a reality to face: Tesla announced that it’s producing the first Model 3 this week and that deliveries will start this month.

According to CEO Elon Musk, the Model 3 has passed all regulatory requirements, and the first production car will be completed on Friday, July 7. The automaker also has scheduled a handover party for the first 30 Model 3 customers at its Fremont, California, assembly plant three weeks later, on July 28.

It will be slow going at first: Tesla will produce 100 cars in August, Musk said, but 1500 cars are anticipated in September, and by December, the Model 3 will reach a production rate of 20,000 per month.

The car isn’t just a make-or-break vehicle for Tesla but a litmus test for whether the electric-vehicle market can go mainstream at more than niche sales levels. Tesla has reportedly gathered more than 400,000 refundable deposits for the Model 3, at $1000 per car.

2017 Tesla Model 3

Development of the Model 3 appears to have moved along at a rate unprecedented for the auto industry—and even faster than what Musk and company said they expected. It’s been just over 16 months since March 2016, when the Model 3 was given a splashy debut as a rolling concept car with a newly conceived body structure. Even as of March 2017, Tesla reported that it hadn’t yet moved to the final “beta prototype” stage; and Musk had said at an earlier point that Tesla wouldn’t actually meet the July 1 production start.


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An Uptick for Tesla’s Other Models

Also this week, Tesla revealed that it delivered just over 22,000 vehicles globally in the second quarter of 2017, with its Model S fastback sedan selling slightly better than the Model X SUV, for a total of about 47,000 deliveries in the first half of 2017. That’s a lot better than last year, when Tesla missed its forecast numbers and delivered some 29,000 vehicles globally in the first half of 2016.

Deliveries would have been stronger, the automaker said, if it weren’t for battery-supply issues with the 100-kWh pack in the Model S and Model X—not associated at all with the Model 3’s pack, which will use a different cell format. Tesla also added, curiously, in its quarterly update that “it is now rare for a newly produced Model X to have initial-quality problems”—a nod to the early issues, especially centered around the complicated Falcon Wing doors, that plagued early examples of the mid-size SUV.

Citing the Model X’s complexity and initial difficulties, Musk said Tesla has intentionally kept initial builds of the Model 3 very simple—and much closer to the model’s claimed $35,000 base price than earlier suspected. Versions with all-wheel drive and higher-performance variants are expected to follow some months (or years) later.

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