Tesla’s lifeblood over the next five years will be the Model 3. The product line is expected to generate $20 billion in revenue at its peak, said CEO Elon Musk, who added that it will help finance the automaker’s other projects. This means a lot depends on Tesla bringing the Model 3 to production and the market within the expected price range and on time.
Tesla building a fleet for Model 3
Citing sources familiar with the matter, Electrek says that over the past two months, the electric car maker has been ordering enough Model 3 parts to build a fleet of around 300 prototypes. Even though this is a good indication, it should be noted that this does not mean the number of parts divided by the number of parts per vehicle necessarily means the automaker will build a fleet of 300 since some of the parts will be used for process validation outside of prototypes and other processes, the report says.
Currently, only two working prototypes, a silver model and matte black model, have been spotted since the reveal of the vehicle. The company is displaying a third shell prototype at the Gigafactory. The two working prototypes will be dubbed “Alpha prototypes.” In an SEC filling after the reveal event in March, the automaker confirmed having completed the “Model 3 Alpha Prototype.”
The number of units normally rises significantly with a fleet of beta prototypes, and currently, the electric car maker should be in this phase for the Model 3 as it confirmed being “pencil down” on the design a few weeks ago.
Production update expected during Q2 results
Tesla is also working on a $1.3 billion expansion of its Fremont factory for the Model 3 assembly line. The U.S.-based automaker aims to produce a fleet of “release candidates” after the beta prototypes are done and the assembly line is up, Electrek says.
For instance, Musk confirmed during the development process of the Model X last year that the automaker was operating a “captive fleet of hundreds” of Model X release candidates about 10 months before it achieved volume production of the all-electric SUV.
“Summer 2017” or roughly about 12 months from now is the official timeline for volume production of the Model 3. Hopefully on Wednesday when the EV firm announces its Q2 earnings, it will also provide an update on its production plan for the much-awaited car.
On Monday, Tesla shares closed down 2.04% at $230.01. Year to date, the stock is down more than 3%, while in the last year, it is down almost 14%.