Tesla’s Model 3 electric sedan has been delayed. Again.
According to the company’s website, the dual motor, all-wheel drive version of the car has been delayed until mid-2018, while the standard, least expensive 220-mile range version has been delayed until “late 2018”.
"As we ramp production, deliveries for Model 3 reservations placed today will begin in late 2018," says the company website. Newly ordered Model 3s won’t be delivered for between 12-18 months.
Thus far, all Model 3s that have been delivered are the single motor, extended battery range versions that can cost north of $50,000—about halfway between the company’s price tag for the most basic Model 3 and the far more luxurious sedan, the flagship Model S.
Despite delay after delay, demand for the Model 3 remains strong with new orders coming in every day. The issue has always been demand far outstretching production.
Delays have thus far been blamed on a number of factors, however, current and former Tesla engineers have revealed that poor build quality on cars and components have required incredible amounts of repair and rework. Tesla’s Fremont factory was completely shut down at the end of February so their manufacturing facilities could be upgraded and hopefully cut down on the production of faulty parts.
Last January, Tesla delivered roughly 1,550 cars--far short of Elon Musk’s optimistic estimate of 20,000 cars a month by 2018. He has since revised Tesla’s production estimate to be around 2,500 cars in March, and finally reach 5,000 cars per month by June.
However, with so few cars being produced the company may find demand for their Model 3s dry up as government rebates providing $7,500 off the price of a new Model 3 begin to evaporate. The government EV tax credit will start to be phased out after Tesla delivers 200,000 vehicles, becoming $3,750 after 6 months, then $1,875 after another six months, before finally disappearing altogether.
When that happens, Tesla may find drivers willing to settle for a Nissan Leaf or a Chevy Bolt rather than pay the higher sticker price of a brand new Model 3.