Will Tesla Model 3 Electric Car Hit 2017 Production Date?

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2012 Tesla Model S beta vehicle, Fremont, CA, October 2011

2012 Tesla Model S beta vehicle, Fremont, CA, October 2011

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Electric-car maker Tesla Motors has done many remarkable things in its short decade of existence--including a few the auto industry viewed as impossible.

But the company has never managed to get a car into volume production on the date it first announced.

That applied to its Roadster, the Model S sedan, and the Model X electric SUV.

DON'T MISS: Tesla Model 3, Next Electric Car: Roundup Of What We Know Now (Jun 2013)

Last week, news emerged that the "alpha prototype" for the company's third-generation product, the 200-mile, $35,000 Model 3 sedan, has not yet been built.

When that car--then dubbed Model E--was first announced, Tesla CEO Elon Musk said it would go into production "by the end of 2016."

Industry consensus has viewed the Model 3's earliest possible arrival date as the end of 2017.

2015 Tesla Model S 70D, Apr 2015 [photo: David Noland]

2015 Tesla Model S 70D, Apr 2015 [photo: David Noland]

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But Tesla's most recent quarterly filing with the U.S. Securities and Exchange Commission includes a note that the company has not yet built any "alpha" prototypes of the Model 3.

The sequence of model development, using Tesla terminology, goes like this: First comes a concept vehicle, which may or may not run.

Then come a small handful of "alpha" vehicles, hand-built at great expense to start the process of finalizing the details of the vehicle's structure, styling, and powertrain.

ALSO SEE: 2015 Tesla Model S 70D: First Drive Of New Electric Car Base Model

Finally, a dozen or more "beta" vehicles are put through rigorous testing.

Still largely hand-built, these vehicles are similar to the final production car, but far from identical--and they will likely be modified with the latest updates numerous times during their life.

In Tesla's case, here's how that schedule worked for the Model S:

  • Model S design first revealed: March 2009
  • Alpha prototype: December 2010
  • Beta prototypes: October 2011
  • First production car delivered: June 2012

2012 Tesla Model S beta vehicle, Fremont, CA, October 2011

2012 Tesla Model S beta vehicle, Fremont, CA, October 2011

Enlarge Photo

As of March 31, according to coverage of Tesla's SEC filing in The Wall Street Journal, the Model 3 alpha prototype had not been developed.

That fact came within a discussion of Musk's compensation in the filing; the CEO will not receive certain performance-based equity grants until the alpha and beta prototypes of the Model 3 are completed and the car goes into production.

Following the Model S timetable, to deliver the first Tesla Model 3 by December 2017--just 30 months hence--Tesla wouldn't have to have its engineering prototype alpha model running until June 2016.

Vehicle development is being overseen by engineering chief Chris Porritt, previously of Aston Martin.

Avoiding Osborne Effect

But following that timetable, it might be expected to show a design for the Model 3 this spring--which is unlikely, for several reasons.

First, the company's main focus today is getting its Model X electric SUV into production and starting to fill the 16,000 orders for which it says it has taken deposits.

Second, releasing a design that lets the public visualize its next product runs the risk of subjecting Tesla to the "Osborne Effect."

Tesla Model X prototype photographed on test, California, Feb 2015. Photo by Simerjit Dhaliwal.

Tesla Model X prototype photographed on test, California, Feb 2015. Photo by Simerjit Dhaliwal.

Enlarge Photo

That's the hit to a company's sales when demand for current products falls substantially after future products with far better specifications and prices have been announced.

Tesla needs to keep selling its Model S and Model X vehicles to generate the cash to the develop the Model 3.

So it likely won't say much about the third-generation car until well after those cars are at full production capacity--which Musk says will be a rate of 1,000 cars a week by the end of 2015.

Coverage last summer indicated that Tesla might not reveal the car until sometime next year. In other words, watch for those spy photos.

Tesla battery gigafactory site, Reno, Nevada, Feb 25, 2015 [photo: CC BY-NC-SA 4.0 Bob Tregilus]

Tesla battery gigafactory site, Reno, Nevada, Feb 25, 2015 [photo: CC BY-NC-SA 4.0 Bob Tregilus]

Enlarge Photo

Gigafactory dependency

There's another risk factor in the Model 3 launch dates, however. The car itself may be ready to go into production within two years.

But if Tesla's planned battery plant in Nevada--its first "gigafactory"--isn't simultaneously on schedule and producing the needed quantities of lithium-ion cells, there will be no energy storage to go into the new model.

MORE: The Tesla Gigafactory Is Big; Really, Really Big--This Big, In Fact

Cell fabrication plants are notoriously finicky, and boosting the quality and yield of the electrode materials to economic levels can be challenging.

Tesla's cell partner, Panasonic, will be providing most of the equipment and expertise for the plant, which will not only make the cell components from raw materials but will also produce completed battery packs.


 
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