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Tesla Set To Start Test-Building Model 3 On February 20

Tesla Inc (NASDAQ:TSLA) plans to launch test-building of its highly-anticipated Model 3 on February 20, Reuters reported on Thursday, citing sources familiar with the matter.

Tesla would likely build as pre-production a small number of vehicles to test the assembly lines and auto parts, the sources said.

The Model 3 is expected to sell at a starting price of US$35,000 before incentives, with production slated to begin in the middle of this year.

Separately, a Tesla spokesman told Reuters that the company would be pausing – for a short period of time and as planned – production at its California assembly plant to add capacity to its paint shop there in preparation for the Model 3 production, plus general maintenance.

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,” Reuters quoted the spokesman as saying.

When Tesla unveiled its plans for Model 3 last year, analysts and experts had described the timeline as too ambitious, given Tesla’s track record of missing quite aggressive production targets.

Tesla missed its 2016 target, delivering 76,230 vehicles last year, which was less than its target of 79,000 deliveries. Still, many analysts had expected the electric vehicle carmaker to miss that target.

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Regarding Model 3, one source told Reuters last week that the model is still undergoing changes in design, which may delay the ramp-up to full production. Some analysts expressed skeptical views that Tesla could launch Model 3 production by July, with Barclays analyst Brian Johnson saying “We assume 0 Model 3 deliveries in '17” in a note in early January. Another analyst, Adam Jonas at Morgan Stanley, said in a note a couple of weeks later that the Model 3 “soft launch” may be delayed until late into this year.

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By Tsvetana Paraskova for Oilprice.com

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  • JHM on February 10 2017 said:
    I'd be satisfied if Tesla delivered 10k this year because that is enough work through any serious hiccups in ramping up production. They'd be ready to hit solid production numbers in 2018.

    By far the biggest constraint on being able to deliver anything approaching 500k in 2018 is ramping up the Gigafactory. They are going to need about 50 GWh, at the very least 35 GWh, of batteries to handle their auto production schedule. So interested Tesla observers will be watching the Gigafactory. No batteries, no EV.

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