Tesla Model 3 Arrives as Elon Musk Warns of ‘Manufacturing Hell’

Next few months could be bumpy as production ramps up toward goal of 10,000 vehicles a week

Tesla’s all-electric Model 3 sedan
Tesla’s all-electric Model 3 sedan PHOTO: TESLA

FREMONT, Calif.—Tesla Inc. Chief Executive Elon Musk on Friday revealed new pricing tiers, battery range and other details of the all-electric Model 3 sedan that he hopes will help transform the Silicon Valley niche-car company into a more mass-market maker.

The four-door sedan will start at $35,000, as promised, but will also be offered in a $44,000 version that has a range of up to 310 miles between charges, 90 miles more than the base model and higher than the all-electric Chevrolet Bolt’s 238-mile range. The prices exclude any federal tax credits.

Tesla has received more than 500,000 reservations for the Model 3, Mr. Musk told reporters at the auto maker’s factory in Fremont.

He reiterated that he believes the company can build 10,000 vehicles a week, or 500,000 a year, by the end of next year and cautioned that the next few months could be bumpy as the car maker ramps up production. The first production model of the Model 3 began earlier this month.

“It’s an amazing car, but we’re going to go through at least six months of manufacturing hell,” Mr. Musk said.

He stressed that any trouble with getting parts from suppliers could delay his plans. Tesla has a history of missing production goals.

Later in the evening, during a live-streamed event outside the Fremont factory, Mr. Musk showcased the first deliveries of the sedan to employee customers, who will help identify any glitches as they drive the automobile. Deliveries of the first vehicles to nonemployee buyers may begin in September or October, according to Tesla.

Tesla revealed that the base Model 3 has a 220-mile range and can accelerate from zero to 60 miles per hour in 5.6 seconds, according to Tesla. The more expensive version can reach 60 mph in 5.1 seconds. For an additional $5,000, customers can add premium features including a nicer interior, a glass roof and a more powerful speaker system.

Excitement for the car and for Mr. Musk’s vision of personal transportation has helped Tesla shares soar more than 50% this year, lifting its market value past that of Ford Motor Co. , and Friday is “key to maintaining hype,” Colin Langan, an analyst for UBS, told investors this week in a note.

“Expectations are high; therefore positive media reaction to the production vehicle is important,” he said.

But Mr. Musk must walk a fine line in marketing the Model 3: stoking excitement without drawing customers away from the more expensive Model S sedan and Model X sport-utility vehicle. Second-quarter sales fell short of analysts’ expectations, fueling concerns that demand for those models was softening.

The Model 3’s arrival represents a potential inflection point for the automotive industry. Car makers long have talked about electrification but haven’t captured the popular attention of customers as Tesla has in 14 years.

“If it’s successful—in terms of volume and attracting mainstream buyers as promised—it could be the breakthrough we need to, at least, have wider traction for electric vehicles,” said Michelle Krebs, an analyst for Autotrader. “But there’s a big challenge…They’ve got to launch it flawlessly and build it in high volume flawlessly and deliver what they promised.”

Tesla’s rise, along with regulatory pressure and government incentives, has pushed traditional auto makers’ electric-vehicle programs. Volvo earlier this month said that by 2019 all its new models will be either hybrid or full electricGeneral Motors Co. , Toyota Motor Corp. , Volkswagen AG and Daimler AG plan to sell millions of electric vehicles by 2025.

After the Model 3 was unveiled in March 2016, reservations soared to almost 400,000, according to Tesla. Until Friday, the company had stopped saying how many people have put down $1,000 to be on the list to buy the vehicle. Mr. Musk reiterated that customers ordering a Model 3 now will receive it late next year.

Write to Tim Higgins at Tim.Higgins@WSJ.com

Appeared in the July 29, 2017, print edition as ‘Tesla Rolls Out New Sedans.’

https://www.wsj.com/articles/tesla-model-3-arrives-as-elon-musk-tries-to-manage-expectations-1501234208

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One Response to “Tesla Model 3 Arrives as Elon Musk Warns of ‘Manufacturing Hell’”

  1. daveyone1 Says:

    Reblogged this on World4Justice : NOW! Lobby Forum..

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