Tesla chief executive Elon Musk has admitted that the company still isn’t in a position to build the long-promised, $35,000 Model 3.
While speaking with members of the press shortly after Tesla posted just the third quarterly profit in its history, Musk said the entry-level Model 3 is still roughly six months away.
“If we can produce the $35,000 car today, we would do it. But there is more work to do before we can make $35,000 car, and have it be positive gross margin. We’re probably less than six months from that,” he said.
“We are trying to provide most affordable electric car options that we can. And since we just don’t have the ability to get to the $35,000 car right away, we thought this [the medium range version] might be a way to offer it as an intermediate step.”
To make the base Model 3 a reality, Tesla is focused on cost optimization and improving the yield of its production lines to bring manufacturing costs of the Model 3 to $30,000 or less.
In the third quarter, Tesla delivered 56,065 Model 3s in North America, generating $6.8 billion in revenue and securing $311 million in profits. The company also revealed that it is looking in margins greater than 20 per cent for the Model 3 thanks to the lowered cost of raw materials and by limiting the numbers of hours needed to build the vehicle.