Tesla Motors is facing a huge increase its production output in order to meet the ambitious goals set by CEO Elon Musk.

He says he expects the company produce 500,000 electric cars per year by 2018.

Much of that volume will come from the Model 3, the 215-mile, $35,000 sedan Tesla unveiled earlier this year, and plans to put into production by the end of next year.

CHECK OUT: Six Tesla Model 3 challenges Elon Musk has to overcome

Any delay in the Model 3 launch won't leave the company much time to ramp up production by 2018—and Tesla has failed to meet every initial deadline it has set for new-car launches so far.

The task of ensuring that record ends with the Model 3 falls to Peter Hochholdinger, the ex-Audi executive who Tesla hired to manage car production in May.

Hochholdinger brings significant relevant experience from the German automaker, notes a recent profile in Manufacturing Leadership Journal (via Seeking Alpha, subscription required).

Tesla Model 3

Tesla Model 3

He holds a materials science engineering degree from the University of Erlangen-Nuremberg, and worked at Audi for more than 24 years before coming to Tesla.

He was senior director of production for the A4 sedan, A5 coupe and convertible, and Q5 crossover, supervising production of roughly 400,000 vehicles a year.

Hochholdinger believes Tesla's goal of producing 500,000 cars a year by 2018 is achievable, but that it will require increasing the "density" of the factory to make better use of the available space, as well as possibly speeding up the assembly line.

MORE: Does Tesla have plant, permits to build 500,000 electric cars a year?

Model 3 production will take place within Tesla's current Fremont, California, factory complex, which had a maximum capacity of 500,000 cars per year in its original guise as a General Motors/Toyota joint operation.

Steady Model 3 production will also rely on a supply of lithium-ion battery packs from the company's "gigafactory" in Reno, Nevada.

Unlike the Model S, Hochholdinger said the Model 3 was designed from the outset to be easy to assemble, and that "manufacturing people are involved in the whole design phase."

Tesla factory, Fremont, California

Tesla factory, Fremont, California

Regarding his own input, Hochholdinger said that among other experience, he brings an appreciation of how manufacturing and logistics are intertwined.

He anticipates that the supply chain will be the biggest challenge in attempting to meet Tesla's production goals.

This means working more closely with Tesla's many suppliers, whose production and delivery processes will have to be "streamlined," Hochholdinger noted.

Tesla plans to track parts and subassemblies far more closely while they are in production or being transported to the factory, he said, to help ensure they arrive on time in the quantities needed.

"For the Model 3, that will be even more challenging than it is today," Hochholdinger said.


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