Tesla's Musk hands over
first Model 3 electric cars to early buyers
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[July 29, 2017]
By Alexandria Sage
FREMONT, Calif. (Reuters) - Tesla Chief
Executive Officer Elon Musk said on Friday the Model 3 had over half a
million advance reservations as he handed over the first 30 to employee
buyers, setting the stage for the biggest test yet of the company's
strategy to become a profitable, mass market electric car maker.
Outside Tesla's Fremont, California factory, Musk showed off the $35,000
base vehicle with a range of 220 miles (350 km) on a charge that marks a
departure from the company's earlier luxury electric cars.
Musk took to the stage driving a red Model 3, and said Tesla has
produced 50 of the vehicles so far, including 20 for testing purposes.
Hours before the event, Musk acknowledged it would be "quite a
challenge" to build the car during the early days of production.
"We're going to go through at least six months of manufacturing hell,"
Musk told journalists.
The over half a million reservations are up from about 373,000 disclosed
in April 2016. Customers pay $1,000 refundable deposits for the car,
which is eligible for tax credits.
Any new buyers would likely not receive their car until the end of 2018,
A longer-range version of the car is priced at $44,000 and will drive
310 miles (500 km) on a single charge. The cars feature a streamlined
dashboard devoid of buttons or knobs, with a 15-inch touchstream display
to the right of the driver.
Tesla faces major hurdles living up to the Model 3 hype. The 500,000
vehicles Tesla vows to produce next year are nearly six times its 2016
Were Tesla to produce and sell 500,000 cars per year, the company would
likely outsell the BMW, Mercedes, or Lexus brands in the United States.
[to top of second column]
A Tesla Model 3 sedan is seen in this undated handout image as the
car company handed over its first 30 Model 3 vehicles to employee
buyers at the company’s Fremont facility in California, U.S. on July
28, 2017. Tesla/Handout via REUTERS
Production delays and quality issues marred the launches of Tesla's Model S and
Model X vehicles, and the company blamed production problems for a shortfall
during the second quarter of this year.
Musk has said a simpler Model 3 design will greatly reduce potential
Tesla has burned through over $2 billion in cash so far this year ahead of the
A troubled Model 3 launch could heighten the risks for the company, while a
steady delivery of Model 3s could generate a stream of cash that would allow
Tesla to avoid going again to the capital markets to fund its operations.
Tesla's share price has surged 54 percent since January in anticipation of the
Model 3 launch, and Tesla's pricey valuation now exceeds that of traditional
rivals like General Motors Co and Ford Motor Co.
Until now, Tesla has operated as a niche producer of luxury electric vehicles,
with a charismatic, showman CEO who regularly interacts with fans on his Twitter
Now loss-making Tesla is trying to move into a different league, building
vehicles in high volume for customers able to pay only a few thousand dollars
more than the average price of a conventional car or truck sold in the United
The Model 3 is part of Musk's broader plan to build a clean energy and
transportation company that offers electric semi-trailer trucks, rooftop solar
energy systems and large-scale battery storage systems.
(Reporting by Alexandria Sage; Editing by Joe White, Lisa Shumaker and Kim
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