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Tesla gives an update on Model 3 production plan: new Schuler press online, still on track for 5k/week in 2017 – 10k/week in 2018

Tesla released its first quarter 2017 financial results and shareholders letter today. In the letter, the company gave an update on its plans for Model 3 production.

They reiterated that they are on target for the production 5,000 Model 3 sedans per week by the end of 2017 and 10,000 units per week “at some point” in 2018.

The company added that the preparations at their production facilities have been progressing according to plan- especially their new Schuler press coming online:

“We recently powered on our newest Schuler press line, and have started the commissioning process.  This will allow sufficient time to install and tune die sets ahead of volume production.”

CEO Elon Musk had previously mentioned that the stamping press that they ordered from Schuler could be the biggest bottleneck for the Model 3 at this point.

He later said that he is now confident that they will have the press on time, but he clarified that it will have to be “operating smoothly” in time:

“We are busy building out the stamping facility right now. The question is not whether the stamping press will be here. It’s going to be here well in advance of the Model 3. But the question is really how long does it take to work out the bugs in the stamping line? And how many iterations does this one have to go through to get it operating smoothly?”

This update today shows that they are more confident about bringing it to volume production on time.

They gave updates on other parts of the production process:

“Paint shop preparation has been completed and installations of our dedicated Model 3 body welding and general assembly lines are progressing well.  Equipment installation is also underway for volume manufacturing of cells, modules, battery packs and drive units at Gigafactory 1.  We are working closely with all Model 3 suppliers to ensure their readiness ahead of start of production.”

Tesla said that they spent $553 million in capital expenditure during the first 3 months of the year and that the money “primarily” went to the expansions for the Model 3.

Again, they didn’t want to give any guidance as to how many Model 3 they plan on producing and delivering by the end of the year beyond the goal of reaching 5,000 units per week “at some point” in 2017, but they did say that they will provide guidance on vehicle deliveries for the second half of year after they start Model 3 production in July.

That should be interesting. As previously reported, perfect production execution means around 80,000 vehicles in 2017 based on Tesla’s part orders, but that would be almost impossible.

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