Rumors of Tesla’s Model 3 Delay Have Been Exaggerated

Josh Edelson/AFP/Getty Images

Josh Edelson/AFP/Getty Images

Tesla has a knack for grabbing headlines that most car companies would kill for. Earlier this week, the website InsideEVs published a slide from Tesla’s presentation at the Energy Information Administration conference in Washington D.C. from June 15. While the presentation itself had little in it to warrant reporting, one slide stood out like a red flag. Discussing the eventual cost parity between EVs and gas-powered cars, the eagerly anticipated Model 3 was mentioned, along with the text “$35k/200 Mi-Range EV Planned For 2018.”

This flew directly in the face of what Tesla has been telling the public about the Model 3, which it maintained as late as May would be unveiled in March 2016, and released in 2017. And while the news was met with equal parts disappointment and frustration, it wasn’t exactly surprising. It took three years for the Model S sedan to enter production after its 2009 debut. And after being originally slated to enter production in late 2013, the long-awaited Model X SUV has been beset by a number of delays, and is finally expected to enter production later this summer. With its history of serious delays, and big plans for the Model 3, Tesla can ill-afford another year of setbacks, which is what made this news seem particularly damning.

But what if the slideshow “revelation” was just an overreaction?

 Josh Edelson/AFP/Getty Images

Josh Edelson/AFP/Getty Images

Within hours of the story getting picked up by other outlets, Tesla spokesmen were busy working to dispel any rumors of a Model 3 delay. According to an email sent to Forbes, a spokesman explained “Model 3 remains on schedule. As we’ve stated, we plan to show Model 3 in 2016 and begin production in 2017. Straubel’s slide is a high-level look into when Model 3 will be in full production.” In this context, the slide makes sense, as Tesla’s current timeline has the car entering production in late 2017, making its first full production year 2018.

Source: Tesla

Source: Tesla

Despite the success of the Model S sedan and the eagerly-anticipated Model X, the Model 3 is truly the make-or-break car for the upstart electric automaker. For 2015, the company has a shot at meeting its ambitious goal of delivering 55,000 cars to customers, especially with the Model X entering production. But on the strength of the Model 3, it hopes to be selling 500,000 cars a year by the end of the decade.

That’s a lot to ask of a single model, especially an electric one. Details are still sparse, and will probably stay that way until the company unveils a prototype next year. But we do know that there will be both a crossover and a sedan wearing the Model 3 badge. The cars will be about 20% smaller than the Model S, have a range of 200 miles per charge, and cost around $35,000 before government incentives. This means that buyers could potentially take home a Model 3 for well under $30,000, and that alone is enough to make the major automakers nervous.

Tesla Model X

Source: Tesla

Up until now, the bigger automakers have done little to directly compete with Tesla, which despite its large media footprint is still a bit player in the industry. But the Model 3 truly could be a game-changer, and with the development of its potentially disruptive new model, Tesla appears to have awakened a sleeping giant. Chevy has announced that its all-electric Bolt will debut in 2017 and offer similar features to the Model 3 at a competitive price. Nissan’s next-generation Leaf should hit showrooms around then, and Ford has just added 200 engineering engineers to its EV program to start playing catch-up.

With the competition heating up, timing is everything for the Model 3, and another major delay could kill whatever impact it might have on the market. Tesla is still years away from becoming profitable, and with the might of the auto industry beginning to view it as a competitor, a major misstep could be a mortal blow to the Silicon Valley upstart. So is the Model 3 delayed? No, at least not for now. But until Model 3s start rolling off the assembly line in about two years, anything can happen.

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