Tesla Model 3 Continues Production Problems And Cost Issues

Tesla and SpaceX CEO Musk participates in a "fireside chat" at the NLC 2018 City Summit in Los Angeles
Tesla and SpaceX CEO Elon Musk participates in a "fireside chat" at the National League of Cities (NLC) 2018 City Summit in Los Angeles, California, U.S. November 8, 2018. (Photo: REUTERS/Kyle Grillot)

Tesla remained in having issues with creating the upcoming $35,000 Model 3 car available for the promised price. The car reportedly received a positive response, reviewers and regular users were impressed by its futuristic features, but actually, buying one of the vehicles has proven to be a great frustration to many customers.

According to Digital Trends, the people who desire to own a Model 3 have to put down a deposit. And even then, over a quarter of orders have been refunded due to production delays. As of writing, Electrek has reportedly unveiled how Tesla CEO Elon Musk said to employees that the struggles with the Model 3 production are very much still ongoing. While he confirmed that the famous auto company has now met their production goal of 1,000 Model 3s which comes out off the line in a day, to maintain this rate is definitely a major challenge. It turns out the construction of car bodies is currently one of the limiting factors in production.

Meanwhile, a cost issue was raised as well. Musk said the target cost for producing a Model 3 is around $38,000. Obviously, this is $3,000 higher than the aimed sale price of the car at $35,000. Tesla is hoping for more improvements in the production efficiency as they can hopefully decrease the number so that the Model 3 may become more profitable to produce or at the very least break even. The 47-years-old is confident and during the previous month, he shared how he believed Tesla can achieve a $35,000 Model 3 within 6 months.

It may seem like a big issue for Tesla being currently unable to produce their vehicles at a cost that is less than the price they sell for; in the long run, this might be a sound strategy.  Model 3' affordability, when compared to Tesla's high-end offerings, means the brand is now accessible to a much larger audience.

Their guests are no longer just going to be auto enthusiasts with money to burn, but also regular drivers. Therefore, this opens up a much larger range of potential customers too as raising the profile of the brand. This makes it a more acknowledged name in car manufacturing. As Tesla scales production, they are set to produce the car more cheaply. Furthermore, most buyers will likely end up paying a bit over the base price of $35,000 with the options and trims available for Tesla products.

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