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Tesla Model 3: Elon Musk updates his guidance on production ramp up and deliveries

Tesla CEO Elon Musk has often warned that the production ramp up of the Model 3 is difficult to predict since they are aiming for an exponential growth rate to reach as many as 8,000 units per weeks next year.

Now that production is expected to start Friday, Musk updated his guidance for the ramp during the next few months and it is unsurprisingly slower than what was previously guided. 

As we previously reported based on Tesla’s disclosed parts orders for the Model 3, perfect production execution would have meant around 80,000 vehicles delivered by the end of the year.

But we warned that it is never perfect and now Musk seems to guide about roughly half of that for 2017.

In his series of tweets last night to announce the start of production this week and the delivery event on July 28th, Musk gave some guidance on the early production volume.

Even though production is expected to start this week, only 30 units should be delivered by the end of the month:

That should go up to 100 next month and 1,500 in September, according to the CEO.

He still expects to hit the previously guided 5,000 units per week mark by the end of the year, but in December instead of September as originally planned with the parts orders schedule:

Depending on when they reach that rate in December and what it looks like in October and November, it seems that Tesla shouldn’t deliver more than 30,000 to 40,000 Model 3 vehicles in 2017.

Tesla had already accumulated more reservations with deposits for the vehicle on the day of the unveiling before the vehicle was shown on stage. Within a few weeks, Tesla had reached close to 400,000 reservations, which mean that less than 10 percent of them will get their cars by the end of the year.

Based on Tesla’s previously announced plans to concentrate early production for deliveries to reservation holders closer to its Fremont factory, it’s likely that almost all of the 2017 Model 3 production will go to California.

The US east coast and other markets, like Canada, are not likely to get more than a few Model 3 units before the beginning of 2018, but if Tesla is at a rate of 20,000 units per month at that point, it should start going a lot faster.

As of now, Tesla is still guiding deliveries for “mid-2018” for new reservations, but it looks like it could be updated to “late 2018” or even 2019 after the latest production guidance.

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