There is a lot of hype surrounding Tesla's upcoming Model 3 unit, the company's most affordable electric vehicle yet. But while there is a lot of positive feedback about the unit, the company's history has left room for a handful of doubt as well, particularly if the vehicle will be delivered within the promised timeline. Nevertheless, the company has announced the beginning of production.
According to Reuters, Tesla confirmed on Wednesday that it will shut down production at its California-based assembly plant. The shutdown will last for a week and will start within the month. Reportedly, this move will allow the company to prepare for the production of the Model 3 sedan. And with the numbers alone, the company will need as much preparation as it can get.
The latest numbers showed that there were over 400,000 orders of the Model 3, with each order requiring a US$1000 reservation fee for the unit. This number alone is greater than the orders made for the Model S and the Model X, so Tesla definitely has its work cut out for it. The pause in production will theoretically provide the company the time it needs to begin production in July.
"This will allow Tesla to begin Model 3 production later this year as planned and enable us to start the ramp towards 500,000 vehicles annually in 2018," a Tesla spokesperson said. The pause is not supposed to have any material impact on delivery targets for the first quarter of 2017. Moreover, test builds of the Model 3 are scheduled for February 20.
Tesla's targets were made public last year when CEO Elon Musk told investors and its hundreds of thousands of customers that production will begin in 2017. Critics had called out the company then, saying its timeline was too ambitious, particularly because the company had a history of under-delivering in terms of numbers. But with a plan apparently in motion, the company might meet targets this time around.
The built test of February 20 was a strategical choice for the company, as Teslarati points out. The company has already pushed back its fourth quarter earnings call to February 22, two days after planned production. This means that the company would be able to announce literal advances in the Model 3 production.
A Tesla spokesperson was unable or unwilling to provide a definite production timeline but did leave some room for error. "Our ramp-up in production moves as fast as the slowest and least lucky supplier," they said. This is line with a warning from Musk as well, as he told investors last year that there was a possibility of the delay with its July 2017 production target.
Whether or not the Model 3 is delivered within the company's self-imposed target will remain unclear for at least a few more months. Despite this uncertainty, however, the car remains one of the most highly anticipated models in the auto industry. The actual delivery, however, will greatly impact Tesla's standing and investor confidence. Surely, the company will do its best to walk its talk and change the perception that investors and members of the public have on it.
