It’s part of Musk’s messaging to frame the Model 3 as the lesser, more affordable Tesla, not a successor to the Model S; but it’s almost surely also a taunt to traditional automakers, delivered from someone who has become an American corporate antihero.
When Musk said there was nothing to test drive, that applies not just to the Model 3. Stores had been short on test-drive vehicles for the models already in production, so Tesla increased the number of Model X vehicles in the demonstration fleet by 1000 and increased its service loaners by about as much. Including those, Tesla delivered 25,051 Model S and Model X vehicles (globally) in the first quarter of the year—that’s on track for the company’s 100,000 annual global sales target for those two models combined.
Tesla still aims to produce 500,000 vehicles in 2018, and Musk called its one-million annual target for 2020 “quite likely.” The company is sticking to its anticipated July production start for the Model 3 and claims that the car’s development is nearly complete. In a letter to shareholders, Tesla pointed to ongoing road testing and evaluation of so-called Release Candidate vehicles, which have been built using “production-intent tooling and processes.”
Further increases in robotics are essential to getting to that one million mark with the company’s existing manufacturing footprint in Fremont and at the Gigafactory in Sparks, Nevada. Musk points to a simplified product that has been designed for easier assembly, with help from suppliers. “With Model 3, I think we’ll be roughly comparable with the best high-volume vehicle production lines in the world,” Musk boasted.
The automaker is also busy preparing its service network and upgrading its Supercharger network for the heavier traffic once the Model 3 arrives. Globally, Tesla plans to open nearly 100 locations for retail, delivery, and service this year. In preparation for the Model 3, it’s adding more service bays and delivery hubs, and it’s aiming to open Tesla-owned body-repair shops later this year. By taking advantage of the remote-diagnostics capabilities in its vehicles and phasing in more mobile-repair trucks, it already claims to have reduced repair times by 35 percent this year.
Despite its high Wall Street valuation, Tesla continues to burn through cash—about $70 million this past quarter—but figuring in the cash received by leasing partners, it would become a positive $117 million. Tesla continues to make big gains in energy storage and generation; the company reported $214 million in gross revenue, up from $131 million the previous quarter and just $23 million the same quarter a year ago. It’s working to get salespeople specific to energy products (Powerwall backup-power systems and solar panels) into its retail stores.
Model Y and Semi Truck Details
Musk revealed several new pieces of information about the Model Y, the compact crossover vehicle that is due by 2020. Up until now, that model was expected to be very closely related to the Model 3, but Musk said that at least in terms of electrical architecture it’ll be on a different platform. With the Model Y, Tesla will migrate to a high-speed DataRay bus, rather than the current CAN bus. The wiring harness in the Model S is about three kilometers long, but the one in the Model 3 is just 1.5 kilometers and the one in the Model Y will be 100 meters. It will also move away from systems running at 12 volts, which Musk called “wrong for everything.”
It isn’t the first time that the Model Y plan has been changed a bit. Musk originally confirmed via tweet that it would have Falcon Wing doors like the Model X. However, that tweet’s deletion has been seen as a signal the company is planning a more conventional layout.
Musk also revealed that Tesla will make the electric semi itself, not just its powertrain, and that it will be less costly to develop than some might estimate, as it’ll employ a lot of Model 3 parts—multiple Model 3 motors, for example.
Asked when Tesla will stop “antiselling” and go into sell mode on the Model 3, Musk quipped, “Well, I don’t know, maybe later this year.” And by then, we’ll no doubt have a lot more to report.
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