Tesla’s Model 3: Musk Warns of 'Manufacturing Hell' – Investopedia



As Tesla Inc.’s (TSLA) Chief Executive Officer (CEO) Elon Musk delivers the Silicon Valley automaker’s first Model 3 vehicles, he cautions that the next few months could be a bumpy ride. (See also: Citigroup ‘Fundamentally Bullish’ on Tesla, ‘Wait Until Better Entry Point’.)

Musk warns of a “manufacturing hell” as the electric car manufacturer ramps up its production and seeks to build 10,000 of its affordably priced vehicles a week, or half a million a year. The goal targets five to 10 times the volume of what Tesla currently builds.

“It’s an astonishing car, but we’re going to recede through at least six months of manufacturing hell,” said one of the tech industry’s most influential serial entrepreneurs to reporters just before Friday’s “handover” celebration. “It’s going to be fairly a challenge to build this car.”

Tesla’s Most Affordable Vehicle Yet

On Friday, Musk revealed unusual pricing tiers, battery range and other details of perfect-electric Model 3 Sedan, positioned to befriend transform the niche company into more of a mass-market auto player. The four-door sedan will start at $35,000, with a 220-mile range and with the ability to accelerate from zero to 60mph in 5.6 seconds. The car will also be offered in a $44,000 version that has a range of up to 310 miles between charges. For an additional $5,000, customers can add premium features including a glass roof, a more powerful speaker system and a luxury interior. Pricing excludes any federal alternative-energy tax credits.

The first 30 Model 3 owners received their key fobs at the company’s massive plant in Fremont, Calif., final week. Musk told reporters that the company has received more than 500,000 reservations for the unusual vehicle. Tesla, which has a history of lost production goals, could face delays whether it has danger getting parts from its suppliers. The first deliveries of the Model 3 to non-employee buyers are slated for September or October. (See also: UBS Believes the Model 3 Launch Will Determine Tesla’s Future.)



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