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Tesla cuts Model 3 delivery delays for new orders in half as production ramp improves

The story around the Model 3 production ramp as so far mostly been about the delays, but in a surprising change today, Tesla is actually accelerating Model 3 delivery timelines for new orders amid improvements its production ramp over the last few weeks.

Demand for the Model 3 has been through the roof ever since Tesla unveiled the vehicle more than 2 years ago.

The backlog kept growing and even though the company has delivered a few tens of thousands of Model 3 vehicles since the start of production last summer, they still had over 450,000 reservations with deposits at the end of last quarter.

Until now, Tesla was guiding a 12 to 18 months delay to get the car for someone placing a reservation today as they work through their existing backlog.

Today, the company is announcing some new updated timelines as production is increasing and they have a better idea of the demand for the different configurations now that they launched the Model 3 dual motor AWD and Performance versions.

In the US, someone placing a new reservation for the Model 3 with the Long Range Battery with single RWD motor, which is currently the only version in production, was given a 12 to 18 months delay.

Now it will be only 4 to 6 months, according to Tesla’s update.

The Model 3 with Long Range Battery and All Wheel Drive Dual Motor and the Performance versions are going from 12 to 18 months to just 6 to 9 months.

Longtime Model 3 reservation holders who were already invited to configure but were waiting for those versions will get the car in 12 to 16 weeks.

As for the least expensive version of the Model 3 with the Standard battery pack starting at $35,000 in the US, the timeline for new reservations is going from 12 to 18 months to just 6 to 12 months.

Earlier this year, Tesla said that the standard battery pack won’t go into production until late 2018.

While every timeline is seeing an acceleration, Tesla also warned today that Model 3 reservation holders who placed their order in the last batch of invitations will be warned by email today of a slight delay over the usual 3 to 6 weeks delivery timeline once the order is placed.

The automaker claims that the take rate for the last batch of the invitation was higher than anticipated, which created the delay.

Electrek’s Take

Those new timelines are starting to make much more sense. As the weekly production rate increases rapidly, which appears the be the case right now, Tesla is going to need new orders in the US until they expand to other markets.

While the global backlog is still massive, if Tesla keeps its current pace, they could be producing over 5,000 Model 3 vehicles per week within the next 2 months.

At that point, they should start working through their US and Canadian backlogs quite rapidly.

As planned, Tesla is likely to start to expand to Europe and Asia at that point, but the new timelines for new orders in the US will help more people take advantage of the federal tax credit for EVs, which should start to phase out for Tesla buyers in the US next quarter.

In other words, someone placing a new order for a Model 3 right now should still expect at least a partial credit and maybe even a full $7,500 credit if Tesla delivers on the shorter part of those new delivery timelines.

I also wouldn’t be surprised if the delayed orders in the last batch of invitations have to do with pushing orders in Q3 in order to hit the 200,000th delivery mark in the US then and prologue the full tax credit for another full quarter. (Update: Tesla apparently started notifying customers and some are reporting deliveries delayed to June and July, so it’s not impossible.)

What do you think? Let us know in the comment section below.

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