Tesla has set itself a huge goal with the Model 3. When deliveries start later this year, the $35,000 vehicle will be the cheapest car the company has ever produced. That means more potential customers, so Tesla plans to ramp up overall production dramatically to meet demand. It’s a serious challenge, but in a conference call on Wednesday, CEO Elon Musk told investors that the company has taken big steps to make the car as easy to assemble as possible.
“We’ve gone through great pains with Model 3 to design of it for manufacturing and to not have all sorts of bells and whistles and special features,” Musk said during the company’s first quarter 2017 earnings call.
Musk gave the example of the Model X, the company’s SUV that launched in September 2015 nearly a year behind schedule. During development, the car became a “technology bandwagon” for all Tesla’s coolest ideas.
“That is a terrible strategy,” Musk said. “You really want to start off simple and add things over time.”
The Model 3 makes a lot of changes from the Model S, the $68,000 car that’s currently the cheapest Tesla sells. The Model 3 has 1.5 kilometers of wiring inside, for example, where the Model S has double that. Where the Model S has two computers inside, the Model 3 has just one. The Model 3 has fewer seats, less cargo space, and thanks to less advanced technology will have slower acceleration.
The company has also ensured the production process is more streamlined.
“We’ve got a much better supply chain in place, we’ve got the A team from the A suppliers,” Musk said. “We didn’t have that from the Model X or the S.”
The Tesla Model S is currently the cheapest car the company produces.
Tesla has become a household name in the electric car space, but it still makes a relatively small number of cars. General Motors sells around nine million cars per year, but Tesla produces fewer than 100,000.
There are signs that the company is ramping up production. Last month, the company revealed that it produced 25,418 cars in the first quarter of the year, the most the company has ever made in a quarter.
The company aims to go bigger, though. Tesla wants to reach a rate of 10,000 Model 3 cars produced per week at some point in 2018. That’s on top of Model S and X production: Tesla previously set itself the goal of reaching overall production rates of 500,000 cars by the end of 2018.
Alongside the simplified Model 3 design, the company is building the Gigafactory in the Nevada desert to reach this goal. When complete, the factory is expected to be the biggest building in the world at 5.8 million square feet.
“There’s plenty of things with uncertainty, but I don’t know of anything that would prevent us from starting production in July and exceeding 5,000 units a week by the end of the year,” Musk said.
