Is Tesla Model 3 Actually On Original Schedule?

March 2nd, 2018 by Zachary Shahan

I think it was April 2013 when we first got word that Tesla Model 3 production would probably start in 2017. Well, we didn’t have a name for the car yet, so we called it “Tesla’s fourth production model.” Tesla CEO Elon Musk was apparently hoping for a 2016 release, but quietly knew and told himself 2017 was more likely. His exact response to some questioning from Engadget on the matter: “Hopefully 2016, but I would say no later than 2017.”

In August 2013, we found out the name was probably going to be Tesla Model E. Tesla tried to trademark that name to have some fun with the spelling of its eventual vehicle lineup (S-E-X-Y). However, Ford apparently had the trademark “Model E” and didn’t want to give it to Tesla, so Tesla later changed the name to Tesla Model ☰ (aka Tesla Model 3).

What’s interesting to me here is that the statement the car would be in production by 2017 was accurate even though that was long before the car was even named Model 3.

Furthermore, for all the hype of the Model 3 being delayed, look, production actually began on the Model 3 within the timeframe Elon estimated way back in 2013.

[Update: I assumed anyone reading this is well aware of the current matter of the day with regards to Model 3 production and forecasts. That is covered more toward the bottom. The point here isn’t to ignore that, but to put it in much broader context, since I think that’s what’s often lacking from the discussion and also from how we humans think.]

I think the 2017 estimate was mentioned by Elon again in the following year, but I’m not finding any reference to that in our archives.

In late November 2014, I polled our readers about the 2017 production target for the Tesla Model 3. The target at that time didn’t include any forecast for the number of cars produced — just that production on the Model 3 would start by the end of 2017. The majority (62.5%) of our Tesla enthusiast/fanboy readership responded that they didn’t think the Model 3 would arrive in 2017. (Note, in case you missed it: the Model 3 did arrive in 2017.)

By the way, in October or early November 2014, Jerome Guillen (then Tesla’s “Chief Designer,” now head of the Tesla Semi project) stated that Tesla was aiming to produce 500,000 cars/year by 2020. Presumably, if people thought the Model 3 wouldn’t arrive on time, they also thought the 500,000 cars/year by 2020 goal was unrealistic. But Tesla later moved up the 500,000 by 2020 goal to a goal of 500,000/year by 2018 (in response to massive consumer demand for the Model 3). Even though this stretch goal looks extremely unlikely now, the 500,000 cars/year by 2020 goal still seems like a good possibility.

As a side note: We heard rumor in June 2015 that the Model 3 would actually have a range of 250 miles per charge, not simply the promised 200 miles. That was a big rumor, and we weren’t sure whether to get excited or be skeptical. As it turns out, the base Model 3’s EPA-rated range is 220 miles* and the long-range Model 3 has 310 miles of range according to the EPA. (*The real-world range is said to be notably higher.)

In August 2015, these were some of my notes from a Tesla quarterly shareholder report:

The Model 3 design will be revealed in the first quarter of 2016. (Woohoo!)

First deliveries are still expected in late 2017.

Basically, the 3 is still on schedule, but there’s not much more to say at this point.

Tesla thinks it is still on track for 500,000 cars a year by 2020, and that it might even go beyond that. 500,000 is based on Fremont factory production capacity, but Tesla may localize production in some places in 3–5 years. (I’m guessing Australia and China are under consideration.)

Again — first deliveries did occur in 2017. Actually, first deliveries came in the middle of 2017, not the end of 2017. However, it’s true that first deliveries to non-staff customers came in late 2017.

Now, I would also note here that Elon never claimed mass production would begin right off the bat. Anyone familiar with ramping up production of a new vehicle would know that’s not how it would happen. Taking that into account, start of production in the middle of 2017 and slowly ramping that up (with hiccups) through the end of 2017 and beginning of 2018 is actually ahead of the schedule we presumed back in 2015.

And, again, if you look at our 2014 poll, even bullish Tesla fans largely didn’t expect Tesla to get the Model 3 into production in 2017. (Context, Sherlock, context.)

I’ve got another “by the way” note for you. In late 2015, Elon stated: “And with the (Tesla) Model 3 and various iterations on that platform, I’m really confident that we can do, you know, another 300,000 or 400,000 cars per year.” That implies that Elon thought annual demand and production of the Model 3 and Model Y (at least) would total 300,000–400,000 units per year (combined).

The most recent comments from Mr. Musk on this topic (which, admittedly, aren’t super recent) are that he now expects demand for the Model 3 and Model Y to be approximately 500,000–1,000,000 units a year each — which implies 1-2 million units a year combined.

In other words, Elon’s 2015 timeline for the Model 3 turned out to be essentially accurate but he was drastically underestimating demand compared to today’s expectations. (Sound familiar?)

When did the mid-2017 start of production target first come into play? On May 4, 2016, Elon hesitantly shared the accelerated target. You could tell before he said it that he didn’t really want to share the dates, but my guess is he figured the word would get out anyway (or he was just trying too hard to explain how the tofu is made). He unveiled that the official Tesla target for start of production was July 1, 2017. But he emphasized that the target was for suppliers just to try to get them to deliver in a reasonable time frame. The realistic target for actual beginning of production remained late in 2017.

Here was my final summary sentence on this: “So, taking into account the near-fact that some suppliers will be late and there could be tooling/ramp problems, Tesla expects to have the Tesla Model 3 in serious production by the end of 2017 … but the closer to July 2017, the better.”

As it turned out, in the beginning of 2017, everything seemed to actually be on schedule for start of production in July 2017. It was shocking. Most people didn’t believe it. Hardcore critics still claimed Model 3 production wouldn’t start until 2019 or 2020 or something like that. (Marion, I’m lookin’ at you.)

No, volume production didn’t start in the summer or ’17, but production of the Model 3 did indeed start. By that time, of course, many a skeptic, “very serious analysts,” and naysayers dropped their claims of Tesla being unable to produce the Model 3. They stopped stating with 100% certainty that it would be years before the Model 3 went into production, if it ever did. They dropped their claims that there was no way Tesla would hit its targeted “end of 2017” start of production. Nope, the goal posts had moved.

And in the second half of 2017, it finally happened. Tesla finally fell behind on some of its stated production targets for the Model 3. Bottlenecks with battery production in particular — which Elon Musk recently admitted was ironic and presumably due to misplaced complacency — slowed down Tesla’s Model 3 production ramp. Perhaps other bottlenecks are at play as well, but we haven’t really heard of anything else. Anyhow, with even one critical machine down and one piece of the car coming out slower than planned, Tesla has missed a few Model 3 production forecasts in recent quarters. It’s not fun. It’s yet another sign that Tesla and Elon do not defy the laws of this universe and are indeed fallible. But it’s also a bit extreme, short-sighted, and disingenuous to act like Tesla is always late, only late, and needs to find a working watch.

In fact, the bottlenecks in the second half 2017 didn’t stop Tesla from reaching Model 3 production in 2017, as it has targeted since 2013 or earlier. The bottlenecks have slowed down the production increases Tesla was aiming to achieve, but they’ve more or less left Tesla where it was expecting to be when it was forecasting the story back in 2013, 2014, 2015, and 2016.

Elon gets slammed quite frequently for being overly optimistic with timelines. If you look at what he said back in 2013 about Model 3 production beginning no later than 2017, the man was accurate. His estimate was on the mark. His timeline (not quite his hopes, but his committed timeline) was right on the mark.

Who trusted his timeline? Who expected he would actually get the Model 3 into production in 2017? Not many people. And certainly not the people who said Tesla would crash in burn in 2013, in 2014, in 2015, in 2016, and yet again in 2017.

When considering who is more accurate with timelines, then, perhaps it’s time to give Elon a little more props and a little less sass.

Getting to recent targets, it’s indeed no secret that Tesla has repeatedly missed its forecasts for producing 2,500 cars a week and 5,000 cars a week, not to mention 10,000 cars a week. That’s where all the focus is sitting in article after article and forum after forum. Bloomberg‘s snazzy graph on this topic doesn’t go back to 2013 or 2015 statements. It doesn’t even go back to Elon’s statement that a mid-2017 production launch was not realistic and the true goal was to start production by the end of 2017. Nope, Bloomberg puts Tesla’s “initial production target” as a target made a few quarters or so ago.

The Bloomberg effort is cool, and I’d put Bloomberg more on the side of Tesla bulls than Tesla bears, but it just goes to show how the whole framing of the discussion around Tesla Model 3 production is set up.

For sure, it was Tesla’s mistake that in the past year it has been estimating a quicker ramp up than reality delivered. For sure, it’s a bit upsetting and it puts into question Tesla’s current projections. But if you step back and put everything into perspective, dang, Elon nailed it.

As a final note, remember, people repeatedly said the Tesla Model X couldn’t be mass produced. Some “very serious industry analysts” claimed it was fundamentally impossible. Now, Model X production is hitting ~50,000 units per year. What does that history tell us about how the evolution of Model 3 production will play out?

Well, that’s a story for another day — tomorrow.











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