Electric vehicle (EV) manufacturer Tesla finds itself in a unique position. Demand for the eagerly awaited Tesla Model 3 is unprecedented. During the week surrounding its unveiling in March 2016, Tesla received over 325,000 reservations, even in the absence of advertising or paid endorsements.
By May 2016, around 373,000 customers had put down a deposit on a Tesla Model 3. We don’t know an exact reservation figure right now, but it’s probably too many, for Tesla’s liking.
“Anti-Selling” Tesla Model 3
Tesla are already under pressure to clear their backlog of Model 3 orders. This heightened state of anxiety was reflected during Tesla’s Q&A webcast in February. “We anti-sell the Model 3,” Tesla CEO Elon Musk said. “We don’t want to make the line longer,” CFO Jason Wheeler added. And who can blame them? If you were to place an order for a Model 3 today, the estimated delivery time is mid-2018, or later.
With Tesla’s current Model S and Model X lineup, and the future Model Y, Model 3 was originally destined to be the Model E. However, Tesla’s plan was foiled by Ford, which claimed Model E as their own. Tesla changed to Model 3, and had to be content with ‘S3XY’ instead.
Now, the “3” in Tesla Model 3 may be causing some to believe that it is the “next version” of Tesla vehicles and, as such, will surpass the older Model S sedan in terms of performance, features and technology. Given that the Model 3 will have a base price of around US$35,000, compared to US$68,000 for the Model S, it is hard to understand why.
In a number of tweets late last month, Musk attempted to clear the air, while at the same time upselling potential Model 3 customers the Model S:
Am noticing that many people think Model 3 is the “next version” of a Tesla, like iPhone 2 vs 3. This is not true.
— Elon Musk (@elonmusk) March 24, 2017
Model 3 is just a smaller, more affordable version of Model S w less range & power & fewer features. Model S has more advanced technology.
— Elon Musk (@elonmusk) March 24, 2017
@dr_angus Yeah, probably a year from now. S will still win on acceleration though, due to having more space for a larger battery.
— Elon Musk (@elonmusk) March 24, 2017
This sentiment was reiterated in an aperiodic post on Tesla’s blog, titled “Model S or Model 3”:
“While Model 3 will be our newest car, it isn’t ‘Version 3’ or the next generation Tesla. Our higher priced premium models still include the most advanced technology and the best driving experience we have to offer.”
“Model 3 is smaller, simpler, and will come with far fewer options than Model S, but it makes driving feel effortless and offers a good range of at least 215 miles for our starting model.”
“And while innovation at Tesla will never stop, the very best vehicles we make are already available for purchase and on the road today.”
Tesla Q1 Vehicle Production & Delivery — Records Broken
On 2 April, Tesla released their first quarter 2017 vehicle production and delivery figures. Just over 25,000 vehicles were delivered globally in Q1, the highest number to date. This consisted of approx. 13,450 Model S and approx. 11,550 Model X vehicles (Figure 1).
Production in Q1 totaled 25,418 vehicles, another all-time record for Tesla. This is despite regular production being interrupted in early February, due to a short run of an undisclosed number of Model 3 prototypes.
A Chain Is Only as Strong as Its Weakest Link
Looking at the chart shown in Figure 1 above, total global Tesla deliveries in Q1 2017 were up a massive 69% compared to twelve months ago. This figure is a touch misleading, however. At the start of 2016, Tesla were having major problems with the production ramp of their new Model X, due mostly to parts shortages. Tesla outlined this dilemma in their Q1 2016 update:
“The Q1 delivery count was impacted by severe Model X supplier parts shortages in January and February that lasted much longer than initially expected. Once these issues were resolved, production and delivery rates improved dramatically.”
“The root causes of the parts shortages were: Tesla’s hubris in adding far too much new technology to the Model X in version 1, insufficient supplier capability validation, and Tesla not having broad enough internal capability to manufacture the parts in-house. The parts in question were only half a dozen out of more than 8,000 unique parts, nonetheless missing even one part means a car cannot be delivered. Tesla is addressing all three root causes to ensure that these mistakes are not repeated with the Model 3 launch.”
Tesla’s Production Goals
Tesla stated in February 2017 that all Model 3 parts sourcing is currently on target for production to begin this July. The first Tesla Model 3 EVs coming off the production line will go to Tesla and SpaceX employees, so that they can give detailed feedback on the performance of the car.
Things can then be tweaked before volume production begins by September. Production should then steadily ramp up to exceed 5,000 vehicles per week at some point in the fourth quarter of this year, and 10,000 vehicles per week at some point in 2018 (Model S, X and 3 combined).
Tesla has certainly set themselves lofty EV production goals. Keep in mind that the current quarterly production record is 25,418 vehicles, or approx. 1,955 vehicles per week on average. Is Tesla up to the challenge?
Tesla Model 3 Release Candidate in the Wild
Elon Musk has released a short video of a black, release candidate Tesla Model 3 on Twitter. The video is quite low resolution, and was taken in the evening, so little detail can be made out:
First drive of a release candidate version of Model 3 pic.twitter.com/zcs6j1YRa4
— Elon Musk (@elonmusk) March 24, 2017
Reddit user Wayne was driving near Tesla’s headquarters in Palo Alto when he had a close encounter of the Model 3 kind. What may be the same vehicle as above was spotted being put through its paces out on the open road, followed closely by a BMW chase car. Wayne was thoughtful enough to capture some images/video on his phone, which electrek.co has done a good job of stitching together:
While the design of the vehicle looks largely unchanged, there has been numerous speculation regarding added sensors on the C-pillars, and modifications to both the trunk and front fascia. As yet, nothing has been confirmed.
Tesla Model 3 — A Paradigm Shift?
Tesla Model 3 has the potential to cause a paradigm shift, not just in the EV market, but the automotive industry as a whole. With an estimated base price of just US$35,000 (minus applicable government incentives), Model 3 represents an entry level EV which combines looks with awesome performance. Tesla Model 3’s instant torque is good for a 0-60 mph (~100 km/h) dash in under 6 seconds, which is faster than a majority of gasoline powered cars. The base Model 3 will have a range of roughly 215 miles (345 km) per charge, which is ample for most driver’s needs.
We wish Tesla well in bringing its Model 3 to fruition. We hope they can keep the gremlins at bay, and that their suppliers deliver in a timely manner, allowing for a smooth and trouble-free production ramp.
Update: April 14, 2017
After some speculation, Elon Musk today revealed, via Twitter, that the final production version of the Tesla Model 3 will be unveiled in July:
@gucci_mau July
— Elon Musk (@elonmusk) April 13, 2017