Deposit is paid when customers configure their cars - it could signpost a production breakthrough, but also a need for more cash

All Tesla Model 3 customers in the US and Canada have been invited by the company to pay their $2500 (around £1900) confirmation deposits. 

Customers are usually invited to configure their car when their build slot approaches, and the $2500 deposit is paid at this stage. Now, reports the Detroit News, all US and Canada customers have been invited to pay the deposit and configure their cars. 

The move, which has prompted mixed reactions from analysts and critics, with suggestions that the production ramp-up means that the end of the wait is in sight for those having paid their deposits, along with the suggestion that it could be a fundraising exercise as the second quarter draws to a close.

The brand recently has ramped up Model 3 production on a third production line at its Fremont factory - the new line being a temporary structure that was set up in less than three weeks, according to boss Elon Musk

Production, according to Bloomberg, has hit 3400 units per week, but is short of the 5000 per week targeted. A Tesla spokesman said: "Tesla has always required this deposit for all of its vehicle orders, including Model S and Model X, given that we build cars to our customers’ specifications, and that the deposit goes towards the purchase price of the vehicle."

The temporary production facility has allowed Tesla to start building the first all-wheel drive versions of the Model 3. This variant is one of the last to be built due to the company’s production troubles, although production of the entry-level $35,000 car has not begun yet. 

It’s not yet known how long the temporary production line will be operational for or if it will be gradually converted into a full-time production line. 

Our Verdict

Tesla Model 3 2018 road test review hero front

Lowest-price, largest-volume Tesla yet has wooed the buying public in the US. Should UK buyers join the queue for a Model 3?

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Tesla’s other production facility in Nevada is planned to become the largest building in the world, Musk announced at the brand’s annual shareholder meeting, with large-scale developments planned over the next five years. 

This is likely due to the planned introduction of a C-segment hatchback model, which could become the brand’s best seller. It’s expected to be the cheapest car Tesla produces upon arrival, undercutting the $35,000 Model 3 to compete with the upcoming Volkswagen ID. The as-yet-unnamed hatchback will arrive within the next five years, Musk said. 

Musk plans more factories globally to meet growing demand in non-US markets, with the next Gigafactory almost certain to be set up in Shanghai, China. A European production facility has also long been planned but will not arrive before the Chinese plant. 

Read more:

Is Tesla moving too quickly?

Tesla Model Y: small SUV is key to brand's self-sustainable future

Tesla Model Y to be revealed in March 2019; production begins 2020

Tesla compact hatchback to launch within five years

Join the debate

Comments
14

18 June 2018

Not a Tesla basher like many on here  (everyone seems to be entrenched in their view on Musk and the company so the 'debate' has got very dull), but rightly or wrongly constructing a production line in three weeks, in a temporary structure, wouldnt be reassuring were I buying one of those cars. 

18 June 2018
Bob Cat Brian wrote:

Not a Tesla basher like many on here  (everyone seems to be entrenched in their view on Musk and the company so the 'debate' has got very dull), but rightly or wrongly constructing a production line in three weeks, in a temporary structure, wouldnt be reassuring were I buying one of those cars. 

Unfortunately most Tesla fanboys regard ANYONE who makes even the slightest critcism of Tesla or Musk as "Tesla Bashers" when in reality theyre not, theyre simply making legitimate critcism. The "Tesla Basher" tag is even applied if the "basher" likes many things about Teslas/Tesla but criticises other things. This reminds me of most Brexiteers, who immediatley brand ANYONE who remotely critcises ANYTHING about Brexit or the way its being done as "Remoaners" or that the critcisers are "trying to reverse Brexit". In either case, its not mature, sensible or intelligent and it stifles healthy debate.

XXXX just went POP.

18 June 2018
Every time Musk announces a new factory or new models, the news sends shudders down some old inflexible spines. Couldn't Tesla team up with one of the soon to become dinosaurs? Perhaps the answer lies in their starkly different views of future.

18 June 2018

I'm sure building their cars in a shed will do wonders for their quality issues.

 

fadyady wrote:

Couldn't Tesla team up with one of the soon to become dinosaurs? Perhaps the answer lies in their starkly different views of future.

 

Not much logic there, is there? If someone is about to become a dinossaur, why would you team up with them?

 

 

30 June 2018
tuga wrote:

I'm sure building their cars in a shed will do wonders for their quality issues.

 

fadyady wrote:

Couldn't Tesla team up with one of the soon to become dinosaurs? Perhaps the answer lies in their starkly different views of future.

 

Not much logic there, is there? If someone is about to become a dinossaur, why would you team up with them?

Dinosaurs are still with us, they never went extinct - birds ARE dinosaurs and there are billions on the planet. So the dinosaur analogy means he opposite of what you were trying to imply.

XXXX just went POP.

18 June 2018

Smells of bullsh*ts.

This is bollocks of the highest order and utter nonsense.  So we're meant to believe that they managed to reuqisition all of the production machinery for an entire production line, install it, and commission it in 3 weeks?  Have you any idea of the complexity of a modern factory? The lead time for tooling? Bringing it on line, maybe, building it, not a chance (if it's so easy, why haven't they done this three times already to boost production?).

This is classic Musk - come out with an outrageous claim, take the credit then slowly reveal what actually happened if pressured by the (usually fawning) press.

Musk is a genius, but Tesla are out of cash, facing a massive funding crisis, and a whole barrage of mature manufacturers about to launch competitors into the marketplace.  He's desperate to talk up the stock before he asks for funds - why else would he try to make an already broken production process more complicated by introducing a mechanically different second model?

18 June 2018

As someone who's familiar with both logistic planning and building tech businesses, it's simply that Musk is following a policy of moving quickly, identifying issues and fixing them, something that's very familiar to Silicon Valley, less so to dinosaur planners in most old-school corporates. The basic designs are sound - very sound, from my experience driving them - what I'd be less keen on is buying any new Tesla model in its first six-to-nine months of production. That said, they're making the big step change from niche to mass market with the M3, so that will serve them in good stead for the Y etc. He's got smart, agile teams who can (usually) self-organise around a goal or problem, and get things done in a fraction of the time of historical processes. Good on him. I'll be booking my slot on - say - the third Mars mission…

20 June 2018

The purpose of this production line is to built a few dual-motor model 3 cars so that they can be used as press cars and the auto journals can write glowing first drive reports on how fast the new model 3 is. Of course, the production will not be enough to satisfy the demand for dual-motor model 3 Teslas, so the average Joe can't actually buy one. The whole point of this is to build up the hype, boost stock prices, and get more funding (as gagaga already pointed out). Tesla's busines model is so dependent on future expectations that they need to keep up the hype or they go bust.  

29 June 2018

 Reads like Tesla are short of money? a cash flow issue...?, as said, not reassuring when your asked straight off, I hope I’m wrong because there’s no doubt than Elon Musk has “Trumped” the Car World with his business style!

Peter Cavellini.

29 June 2018

....you never know what batsh1t crazy schemes they're going to think of next." 

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