Musk plans to scale back Model 3 production to 2,500 cars a week

Written by Carmel Deamicis, CNN

Since it launched in 2009, Tesla’s Model S has quickly become a top-selling luxury sedan and the brand’s single biggest star.

Although the company has repeatedly insisted its luxury model line has “never been better,” last week it was revealed that Tesla has been cutting back production on the Model 3, its second-tier model, after demand dipped precipitously.

To meet demand, Musk had planned to double production this year from last year’s record, in hopes of producing 5,000 Model 3 cars in each week by the end of this quarter. But he’s now guiding that number lower, to 2,500 per week.

Model 3 Motors. Credit: Tesla Motors

Tesla CEO Elon Musk has cited issues with Model 3’s “most difficult customers,” citing slow uptake of the first generation of luxury electric vehicles, which he says it takes time to understand the car’s capabilities and learn about driver behaviors. The latest reports suggest Tesla has not yet found the ideal balance between asking car owners to trust its tech, and coaxing those customers to use their hands on the wheel.

Although Tesla production was down 54% in July compared to the previous month, Musk believes the company can turn things around, by relying on Model 3’s advanced semi-autonomous driving features, perhaps with the help of outside partners.

“What I love is that if you don’t have the Model 3, you have nothing,” he said. “Where do you get a very, very luxury sedan and the best safety, the best fuel economy, incredible performance, all at a low price and at the same time not be totally insane?”

Musk outlined the company’s vision at a keynote of the National Governors Association’s Summer Meeting in Providence, Rhode Island, on August 15, 2018.

Bringing driverless safety tech to the masses

Since its beta release in the United States, Tesla’s autopilot systems have been scrutinized for their ability to operate in real-world conditions, with some customers having to fight against the limits of the technology, despite the fact that they are fully aware of its limitations.

The Model 3 will not only be made with semi-autonomous features, but it will also have a built-in WiFi hotspot, a feature used by other luxury automakers to keep drivers from needing to worry about forgetting their phones, and more.

“Starting in this car, our goal will be to put all the amazing things that we do into all models of every year,” Musk said. “That’s a real long-term goal, but it means that a year from now, if I could present you to the entire Board of Directors with a car where the advertised range of the car was 186 miles and it has amazing autonomous capability and our driver assistance systems…there’s no reason why it wouldn’t be on that car and that’s what I’ll see in a year.”

Tesla Motors. Credit: Tesla Motors

And while Musk admitted that the Model 3 range is likely not going to match that advertised, he also pointed out that his CEO will not have to make hard sales calls to convince his customers to upgrade from their current Model S, which he thinks is “now the best automobile on the planet.”

“The range isn’t going to be the limiting factor,” he said. “The limiting factor is going to be the fact that we’re going to keep adding these things.”

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