Tesla to take risks as competition closes in on EV market

25 April 2017

Automotive manufacturer Tesla is pushing to ensure its upcoming Model 3 is able to meet its self-imposed volume production deadline of September 2017, skipping the prototype tooling stage to install permanent and expensive equipment on its vehicle assembly line.  

When launching a new model, the conventional approach to manufacturing is to use cheap tooling that can be scrapped once the company achieves the data required to ensure more expensive machinery is up to the task. Instead, it is relying on ′advanced analytical techniques’ including computer simulations to ensure it invests in the correct systems for production. 

Founder and CEO Elon Musk believes the Model 3 rollout will help the company deliver five times its current yearly sales volume, which will help it stabilise expenditure and increase market value, a figure which has already surpassed that of Ford. In 2016 the company sold around 80,000 units but expects the Model 3 and other vehicles, including a sports car, to help it build towards 500,000 sales globally. 

However, the move to bypass standard production techniques comes as the manufacturer issues a recall, affecting around 53,000 Model S and Model X cars due to a potential fault with the electronic parking brake. Vehicles built between February and October 2016 may have an issue that could prevent the brake from releasing, thanks to what it says is a poorly manufactured gear component supplied by a third-party.  

In conjunction with the rapid expansion of its production facility, Tesla is also investing in its charging infrastructure in anticipation of the Model 3 launch, announcing it will double the number of Superchargers available to 10,000 and quadruple its Destination Chargers to 15,000 units globally by the end of 2017. The company hopes this will avoid queues as more demand is placed on the electric charging infrastructure of the future, especially if, as it believes, vehicle sales will exceed half a million a year.  

The move to speed up production could also be down to pressure from other manufacturers launching electric vehicles onto the market which are able to match Tesla’s once market-leading range. Audi will bring its E-tron range to showrooms in 2018, while Jaguar has planned its I-Pace SUV to compete at the same time, with a Volvo SUV, the XC40 Electric, preparing for a 2019 debut. The Tesla Model 3 will also face competition in its market segment from the Mini E (scheduled for 2019) and the Volkswagen Golf E, available now. Tesla may be rushing to ensure it can gain crucial early market share before competitors start to shift the market back to conventional manufacturers.

Photograph courtesy of iStock