Tesla finally met the production goal for its mass-market Model 3 electric car — producing 5,000 in one week.
“We did it!! What an incredible job by an amazing team,” CEO Elon Musk wrote to employees on Sunday. “I think we just became a real car company.”
Elon Musk almost single-handedly revived the domestic and global electric vehicle (EV) market when Tesla introduced its high-end EV sports car a decade ago. But for years, the key question for Tesla was could it deliver consumers a more affordable EV for the masses.
More than two years ago, Musk said the Model 3 would have a range greater than 200 miles and a retail cost of $35,000 (without any tax credits or subsidies).
But just as mass-market cars need mass-market prices, they also need mass production to achieve those prices.
The Tesla Model 3 quickly became one of the most anticipated cars in automotive history.
No car before it had a half-million people each paying $1,000 to reserve a car –more than a year before they would even be delivered.
And Musk kept upping his promises. Last July, when rolling out the first production cars for customers, Musk said the Model 3 would have an extended range version — 310 miles — for $44,000.
But at the same time, Musk told employees that simply delivering all the cars it had pre-sold would require at least six months of “production hell.”
That turned out to be an understatement.
Last summer, Musk set a production goal of 20,000 Model 3’s per week for the end of 2017 — and 500,000 for all of 2018. But the company never came close.
Indeed, it couldn’t even produce 10,000 Model 3’s in the entire first quarter of this year.
Media criticism for Tesla and its CEO soared. At the same time, Musk issued a voluntary recall of 123,000 Model S Teslas because of faulty power steering. Consumer Reports pointed out flaws with the Model 3’s brakes.
Meanwhile, Musk had started sleeping on the factory floor. He even shipped an extra battery production line in from Germany, which Tesla put under a tent.
These moves turned out to be critical for Tesla. As Musk wrote to his workers on Sunday:
We either found a way or, by will and inventiveness, created entirely new solutions that were thought impossible. Intense in tents. Transporting entire production lines across the world in massive cargo planes. Whatever. It worked.
Musk bragged that not only did they hit their target of 5000 Model 3s, but their total vehicle production for the week was 7000.
Not everyone was impressed, of course. Steven Armstrong, the CEO of Ford for Europe, the MidEast and Africa, tweeted at Musk, noting that Ford builds 7000 cars in a lot less time than seven days.
7000 cars, circa 4 hours. ❤️Ford Team❤️ https://t.co/FZSclsFoS0
— Steven Armstrong (@StevenArmstrong) July 1, 2018
Indeed, while Musk has proven he can hit this target for one week by pulling out all the stops, the fundamental question remains can he achieve and exceed this target week after week. And can he actually start to make a profit doing so?
The future of electric cars in this country and around the world is very bright — with Europe, India, and especially China placing very large bets on batteries, EVs, and superfast charging.
Whether Tesla is a big or small part of that future remains to be seen.