Tesla’s first Model 3, the long-awaited electric car that’s priced for the mass-market is expected to roll off the factory floor Friday, the company’s chief executive announced early Monday in a series of tweets.
The $35,000 Model 3 passed regulatory requirements two weeks ahead of schedule, and the first 30 owners will receive their cars at the end of the month, Elon Musk said, paving the way for an ambitious production timeline. Musk had said earlier this year that the Model 3 would arrive by July. The company appears to be making good on its stated trajectory, even as Tesla has been beset by production delays and overshot schedules in the past.
Handover party for first 30 customer Model 3’s on the 28th! Production grows exponentially, so Aug should be 100 cars and Sept above 1500.
— Elon Musk (@elonmusk) July 3, 2017
The first Model 3 customers will have the chance to get behind the wheel during a handover party at the end of the month, Musk said. After the initial roll-out, Tesla is slated to produce more than 1,500 Model 3’s in September, and by the year’s end, Musk expects the company to produce 20,000 units every month. Demand is so high for the vehicle, Musk has said, that customers who reserve one now won’t see their cars until late next year. Tesla hasn’t released order numbers since May 2016, when it said that 373,000 Model 3 reservations had been placed.
While some experts say that Tesla has learned from the production issues it faced with its SUV, the Model X, others have questioned the company’s ability to sustain demand and to squeeze profits from its cutting edge autos. “To produce niche cars like the Model X and the Model S and is one thing, but to roll out a mass-market mainstream car is way more challenging from a production standpoint,” said Jessica Caldwell, the director of industry analysis with the auto-research website Edmunds.com.
Tesla declined to comment beyond Musk’s tweets.
Tesla is aiming to produce half a million cars by 2018, an enormous leap over last year when the company produced only 85,000 units. Early Model 3 customers can choose the car’s color and wheel size. Later customizations include the choice between two engines: one optimized for highway driving and the other for stop and go traffic, Musk said during the annual shareholders meeting last month. But it’s unclear how these configurations will mark up the entry-level $35,000 price tag. Additional costs for Model 3 add-ons could undercut the car’s selling point as an affordable vehicle for a wide range of customers, according to Caldwell.
Investor anticipation and optimism around the Model 3 has lifted Tesla’s stock price to record highs. It’s stock popped on the news during early trading by as much as 2.4 percent before trading down. The company’s stock is up more than 64 percent this year, driving Tesla’s value, now at nearly $60 billion, above some of the biggest automotive players in Detroit. General Motors is valued at $54 billion and Ford is worth $46 billion.
Pulling off a successful launch of the Model 3, and sustaining high-volume production is crucial to Tesla’s broader goal of widespread electric car adoption, Caldwell said. “In order to promote electric vehicles it has to go to the mainstream, and right now they are only selling expensive cars to a very limited, wealthy audience.”
In another sign of Tesla’s ambition, the company plans to unveil a working prototype of its semi-truck model at an event in September. Musk also hinted that the event would showcase some kind of surprise announcement. Teasing the audience at the June shareholder meeting, Musk said, “I’d really recommend showing up for the semitruck unveiling. Maybe there’s a little more than we are saying here.”