Tesla is planning to halt vehicle production for one week in February to prepare for Model 3 pre-production, which the company says will begin February 20.
According to Reuters, the short-term shutdown of its Fremont, California assembly plant will give Tesla time to add capacity to its paint shop as it plans for full-scale production of the Model 3.
“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,” said a Tesla spokesperson.
This sounds like Tesla is on track, or at least close, to meeting its Model 3 production goal.
According to Tesla, suppliers not meeting their own deadlines is the only variable that might delay production of the massively pre-ordered EV.
As we already know, the Model 3 will not be available with the 100 kilowatt-hour battery found in the Model S, and it’s likely Tesla will use the cheaper 60 kWh battery already offered in that model.
At $35,000 before any tax incentives, the Model 3 would be the least expensive vehicle to roll out of Fremont. That would also make it cheaper than the Chevrolet Bolt, its main competition, which carries a $37,495 price tag before tax credits. While some have said that the Model 3 will not be profitable at that price, the Bolt doesn’t break even, either.
It’s unknown how many pre-production Model 3s the company plans to build during this phase of the ramp-up. Tesla also expects to perform general maintenance during the downtime.
[Images: Tesla Motors]
I think this model will be the real make-or-break for Tesla.
Mass production volumes for the factory and service / warranty support for the organization.
@indi500fan: Yes to all of that.
But I seriously doubt the 500k rate (even if it’s calculated by producing 42k cars in the last month of 2018).
They also need to produce a LOT of dealer cars (at least a few hundred, I would think) for test drives when they begin shipping to customers. I won’t buy a car I haven’t driven, or at least sat in.
The pre-production news is good, but they’re a long way from actual production. There is some speculation that this story is timed to mask bad financial news, which shouldn’t surprise anyone.
Tesla is almost ready to start building Model 3’s, but we still haven’t been shown what the final product will actually look like?
Ha, right. Its so strange that people put down money for a car they haven’t seen except for the above mockups. No official production pics.
It’s not that odd, it’s easily refundable and helps ensure access to the full $7500 tax credit before it starts getting phased out.
There are those who insist Tesla cannot reach their goal production rate. Well, to be quite blunt, I don’t care if they do or don’t. If they just get close they’ll have done far more than what many ever thought possible for the company and that’s a huge step forward in my opinion.
Best of luck to them. This is what we need to push the distribution model forward and out of the speciality market to the everyday consumer.
Now if they only have an accessory pack to add a graphic to that blunt nose!
At present, it, and the X and S look like updated Hillman Imps!
“add a graphic to that blunt nose!”
This.
Mole Car needs some eyeballs and lips painted on if it’s going to stay above ground.
“and it’s likely Tesla will use the cheaper 60 kWh battery already offered in that model.”
The Model 3 will use a unique battery from the Model S, constructed from larger, 21700 size cells (Model S uses 18650 size).
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Is the stoppage also possibly an indicator that sales have slowed on the Model S and X? If sales of existing models are slowing down, it might be an early indicator that that model 3 will cannibalize sales of the S with its substantially lower price and more manageable size. Thus a key question is how much such possible cannibalization will hurt Tesla current financial situation – will the Model 3 be an even bigger money loser than the S?
I think you’re on to something, nice post.
Yeah, except that Tesla is profitable with the Model S and X.
As far as I have seen, Tesla has had only two quarterly profits during its entire history, which were largely due to selling carbon credits. Thus it is hard to believe that the S and X are profitable when they are the only major products of the company. Sure the gross margins are high, but a company that never seems to be able to cover their overhead is in trouble, especially if interest rates start to rise and/or various EV subsidies are reduced.
Q: Tesla’s ratio of debt to market cap is much lower than GM, Ford of FCA. So how exactly would high interest rates cause them trouble?
A: They wouldn’t. Just more made-up madness.
Q: Would Tesla be hurt by reductions in EV subsidies?
A: Actually, no. In fact, it will help Tesla. The reason is that the subsidies start to end after a company has sold 200K EVs. So the subsidies end for Tesla within a year, but continue for competitors for much longer, because they don’t manufacture EVs in volume like Tesla.
The reality is that ending EV subsidies helps Tesla because it won’t be at a competitive disadvantage to companies that will receive them in 2018 and beyond.
The more facts you have, stingray, the less garbage you will spew.
none of that supports your assertion that they’re profitable on the Model S and Model X.
Look at their 3rd quarter results.
vogo
if tesla lost money in q4 will you spit that out repeatedly as well?
Only in response to repeated lies.
@Stingray:
Unlikely, though there are some who want to believe so. It makes perfect sense to stop current production to bring new machines online and use the down time to repair any existing minor issues waiting for such downtime.
@ Vulpine
Shutting down a plant for days just to set up to produce verification prototypes, pre-production or series production of a new model is not normal.
TTAC doesn’t allow me to post the link, so go to YouTube and search for “2014 Volvo Model Production Begins Watch The Factory Changeover” to see how Volvo did a model year changeover with five refreshed models during full production.
You want us to watch how the chinese do it? Why do you hate america so much?
@CH1: Have you ever worked in a factory? Have you ever paid attention to what goes on at other auto factories? One-week shut downs for upgrades and maintenance are common and typically scheduled around inventory and new-product introductions. The model changeover you link does not account for a complete new model introduction. The way most of them do it is to shut down one line at a time and keep parallel lines running so there is no total shut down–though even GM and Ford occasionally suspend production to perform such tasks in a given plant.
The point is that right now Tesla only has one active assembly line of which I’m aware, at least as far as the paint booth is concerned–which is WHERE the upgrades are going in. (Try studying the news before jumping to conclusions.) As such, a week-long down period allows a complete upgrade and time to repair, reprogram and fine-tune other assembly processes in a way that doesn’t impact the quality of the vehicles passing through the line while the changes are being made.
“The model changeover you link does not account for a complete new model introduction. The way most of them do it is to shut down one line at a time and keep parallel lines running so there is no total shut down”
And right there you agreed with my point that it’s not normal to shut down the entire plant for days just to set up for a new model.
“The point is that right now Tesla only has one active assembly line of which I’m aware, at least as far as the paint booth is concerned–which is WHERE the upgrades are going in.”
And that’s Tesla’s fault for not engineering their production system to allow the introduction of new models and changes to existing models without shutting down the entire plant for days.
“And right there you agreed with my point that it’s not normal to shut down the entire plant for days just to set up for a new model.”
Except that I didn’t agree with you since the Tesla plant doesn’t have more than one or two assembly lines in operation and only has ONE paint booth intended to support the plant’s full output. It’s the paint booth itself that’s getting most of the upgrade as reported by Tesla when they announced the shut down.
I’ve actually done work on the Fremont plant back in the GM days – didn’t gain my expertise by watching youtube videos. GMAD would shut the plant down (both the truck and the car line) for us to work on it back then – as well as other plants. There’s some equipment that just can’t be installed overnight.
Just to be clear, it is normal to shut down a plant to add an entirely new platform like the Model 3.