Eleven years ago, Tesla CEO Elon Musk revealed the Secret Tesla Motors Master Plan. In it, Musk laid out the vision for his upstart electric car company: Build an electric sports car (the Tesla Roadster), use the profits “to build an affordable car” (which became Models S and X), and use that money to make “an even more affordable car.” Tonight, the first Tesla Model 3 sedans were delivered to owners at the company’s factory in Fremont, California. It’s the culmination of Tesla’s decade-long quest to build that more affordable electric car.
The company has taken more than 500,000 deposits for the Model 3, Musk said at a press conference early Friday, although he pleaded with reporters not to read too much into that number. “We did everything we could to unsell the car,” he said. “Don’t impugn demand from the reservation number.”
Tesla built a handful of Model 3 cars in July, and Musk claims production will slowly ramp up to 10,000 units per week by the end of 2018. That would be somewhere around 500,000 Model 3s per year, five times the number of Model S and X vehicles the company makes today and almost as many cars as Volvo sold in 2016.
Musk describes the Model 3 production ramp as an S curve: slow growth in the beginning, followed by a rapid rise and a plateau. As he has done in the past, Musk noted that vehicle production can move only as quickly as its slowest supplier can deliver parts. About 60 percent of the car comes from the U.S., with 30 percent coming from outside North America and 10 percent from Canada and Mexico.
“I know I’m sandbagging a lot,” Musk said. “But we inherit force majeure risk from everywhere else in the world: floods, fires, tornadoes, sinking ships—you name it. If there’s anything that interrupts the supply chain before we accumulate enough parts, that will interrupt the production ramp.”
Still, Tesla’s engineers and designers worked together to strip out unnecessary parts and to simplify production. Musk said a yearly production rate of 250,000 Model 3s can be built in the same factory square footage as can turn out 50,000 Model S sedans, and he promised further improvements over time. The Model 3 has a big horizontal central touchscreen instead of the giant vertical display plus a screen for the instrument cluster, as in the Model S and X. There are fewer buttons: Things such as the sideview mirrors and the steering wheel are adjusted through the center screen and via buttons on the steering wheel, meaning fewer parts and switches are required. The car is half steel and half aluminum—steel is easier to work with. The battery pack has three modules instead of the 16 present in the Model S.
“There’s nothing in the Model 3 that doesn’t need to be there,” Musk said, thinking back to the production difficulties Tesla had with the extremely complicated Model X. “Everything there has a compelling reason to be there.” Initially, all Model 3 production will be rear-wheel drive only and have the larger, longer-range battery installed.
“We’re trying to have as close to a single configuration as possible as we boot up the production line,” said Musk. “We’re going to do everything we can to make cars as fast as we possibly can.”
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