Elon Musk says Tesla Model 3 car will debut this week, with quick ramp-up ahead

Tesla Model 3
The Model 3 electric car is Tesla Motors’ most affordable model. (Credit: Tesla Motors)

Tesla’s billionaire CEO, Elon Musk, says the first production model of the company’s anxiously awaited mass-market Model 3 electric car will roll off its assembly line on Friday.

Pre-production prototypes of the car have been spotted over the past few months, but in a series of tweets on Sunday, Musk said the model met all of its regulatory requirements two weeks ahead of schedule and is ready for purchase.

Musk said the first 30 customers would get their Model 3’s at a party on July 28, and that the production rate at Tesla’s plant in Fremont, Calif., would ramp up to 20,000 cars per month by the end of the year:

That’s roughly triple the average production rate of 84,000 that Tesla recorded for all its models in 2016, including the Model S sedan and the Model X SUV. But even at 240,000 cars a year, it’d take years for Tesla to catch up with demand. Although Tesla isn’t providing figures on pre-orders, figures from mid-2016 suggest that well more than have 400,000 people put down deposits.

Musk has said Tesla plans to increase overall production to 500,000 cars per year in 2018, and get to a million cars in 2020 with the addition of the Model Y compact SUV.

Aspirations for the Model 3, which has a base price of $35,000, have been a key driver behind the company’s sky-high share price.

Tesla’s market capitalization ($59 billion) exceeds Ford’s ($46 billion) and GM’s ($54 billion), even though the latter two automakers each turn out millions of vehicles per year.

On the flip side, Tesla’s ability being able to meet its aspirations has been a key driver for skepticism about the company’s long-term prospects.

After a market-opening spike, Tesla shares settled back downward in early trading today, despite Musk’s tweets, in part due to assessments that the company wouldn’t be able to make a profit and maintain quality with its accelerated production schedule.

Tesla’s most recent quarterly report showed that revenue more than doubled year over year, to $2.7 billion, but its net loss widened to $397 million.