Tesla Rolls Model 3 While Citing Production Challenges

Amid a crush of publicity and a rollout that rivaled a modern rock concert, Tesla Inc. CEO Elon Musk handed over the first 30 versions of the Model 3 electric car, but warned that production challenges still lie ahead.

“The major challenge for us over the next six to nine months is how to build a huge number of cars,” Musk told an audience of cheering Tesla enthusiasts. “Frankly, we’re going to be in production hell for the next six months, maybe longer.”

Musk said that Tesla’s engineering team “worked to get the part count down” to about 10,000 components, which are sourced from all over the world. Citing an on-screen production forecast, he predicted that the company will reach 5,000 vehicles by December, and added that prospective buyers who order the car now will likely wait until the end of 2018 to get in a vehicle, even in the best case scenario. “The production rate will move as fast as the slowest and least luckiest component,” he said.

Still, the rollout was good news for electric car enthusiasts watching on the Internet around the world. Musk told them that the $35,000 Model 3 is safer than a Volvo, while offering a respectable combination of all-electric driving range and low cost. The new car will feature a peak range of about 220 miles, along with an eight-year, 100,000-mile battery warranty. A longer-range version will offer a 310 miles for an additional $9,000. Safety features include automatic emergency braking, collision avoidance technology, and eight airbags.

During a 15-minute talk, Musk said that the company’s early adopters were the key to enabling Tesla to drive down the costs of the new vehicle. “I’d like to thank all customers who bought an S and an X,” he said. “In doing so, you made the Model 3 possible.”

Early reviews of the Model 3 have been glowing. Bloomberg said that the Model 3 “changes everything,” adding that it compares favorably to the General Motors all-electric Chevy Bolt. “The Bolt is an economy gasoline car that’s been electrified; the Model 3 is – something altogether different,” the news agency wrote.

Still, some are not yet convinced of the vehicle’s imminent success, despite a waiting list that is said to approach a half-million potential customers. “Keep in mind, Tesla has never made a mainstream car,” Sam Abuelsamid of Navigant Research told Design News. “And consumer expectations in the mainstream segment are very different from those in the premium segment. When you get down to the mainstream segment people are much more dependent on their vehicles for their transportation needs. They’re much less tolerant of the kinds of quality issues that Tesla has had in the past.”

For now, however, Tesla’s first hurdle will be its production ramp-up. Musk hinted that Tesla’s high volume expectations will be vulnerable to outside forces, in part because about one-third of vehicle’s parts come from outside North America. “Almost anything that goes wrong in the rest of the world” he said, “will interrupt the production progress.”

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