Tesla adds Model 3 build complexity: too early, or on time?


2018 Tesla Model 3

2018 Tesla Model 3

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When Tesla opened up orders this week for the all-wheel drive Dual Motor and Performance versions of its Model 3, some reports suggested it was early and might complicate the company's ability to ramp up to 5,000 units a week.

Tesla emphatically says the move only represents the company sticking to its original rollout schedule, when it promised (repeatedly) to make all-wheel drive and Performance models available in the middle of this year.

So which is it? The answer may be key to understanding how prepared the company is to maintain quality and reach its target of 5,000 Model 3s a week (now raised to 6,000). The new variants are now available for some customers to order, but they won't be built or delivered until mid-July, Tesla CEO Elon Musk said in a tweet announcing the new models.

Musk also said on Twitter a few days later that the company was dependent on sales of those more profitable Model 3s to stay afloat financially. The new versions will reportedly sell for up to $78,000—or more. In a response to Twitter user Ivaylo Ivaonv, who asked when the base $35,000 Model 3 might be available, Musk responded:

Earlier, in April, after the company had released its first-quarter production report saying the company was building about 2,200 Model 3s a week, Musk  responded to another Twitter user wondering about the all-wheel drive model, saying that the company would not begin producing them until after it had reached its 5,000-unit-a-week production target.

Piecing those tweets together into a timeline, this might mean one of two things:

  • The all-wheel drive and Performance Model 3s are only on the original schedule because Musk pulled them forward in a bid for cash, after having earlier delayed them due to production problems. (Tesla user groups had reported in April that delivery schedules had been delayed until late 2018.);
  • Or, after removing some production bottlenecks at the factory last month, the company has already reached a production rate of 5,000 Model 3s a week, or at least that Musk is very confident that it will hit those targets in the coming weeks before all-wheel drive an Performance Model 3s go into production in mid-July.

Which answer is correct may be revealed in the company's second-quarter sales call, likely in early July, in which it will report production and delivery numbers. At that point, the public will hear whether the company has reached its production goals. By then, according to the company's statements, customers should be eagerly awaiting delivery of their Model 3s.

 
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