July is a big month for Tesla (NASDAQ: TSLA). The electric-car maker has already said both the final unveiling of its highly anticipated Model 3 and the beginning of the vehicle's production would take place during the month -- two events that would mean Tesla is bringing its most important vehicle to market right on schedule.
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But with the first of July coming this weekend, Tesla has refrained from giving investors a more specific date for when it will be sharing more details about the Model 3's looming release -- until now.
A Model 3 update
When a fan asked Elon Musk late Thursday night about whether the Tesla CEO could share an exact date for when the Model 3 will be released, Musk responded, "News on Sunday."
News on Sunday— Elon Musk (@elonmusk) June 30, 2017
While it's not clear whether Sunday's news about Model 3 will simply be a confirmation of the exact unveiling date, details about when production or deliveries will begin, or something else, investors should certainly tune in on Sunday to find out what the news about Tesla's important Model 3 entails.
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What we know so far
Even before Sunday's news about Model 3, the company has already shared some insight into its timeline for the important vehicle.
- The final unveiling of Model 3 will occur in July.
- Model 3 production will begin in July.
- Tesla will deliver the first production Model 3 in July.
- The Model 3 configurator will go live around the end of July, but it will initially be very limited.
- Tesla is aiming to achieve a Model 3 production rate of 5,000 vehicles per week before the end of 2017, and 10,000 vehicles per week at some point in 2018.
Tesla has said its Model 3 will have a starting price of $35,000 and driving range of at least 215 miles. In addition, Tesla will eventually sell several battery size options for the vehicle. Tesla has also been sure to emphasize that its Model S, which has a starting price of about $70,000, will be a better vehicle than the Model 3. Not only will the Model 3 be slightly smaller than the Model S, but it will also offer fewer options and have a slower acceleration time.
Timing is everything
It's critical that Tesla's Model 3 launch goes as planned. From the very beginning of the Model 3's development, Tesla has emphasized that timing is crucial for the vehicle. Given the significant price decrease of Model 3 compared to Model S, Tesla anticipates that Model 3 will help its total vehicle production jump from an annual run rate of about 100,000 units today to about 500,000 units next year. Tesla, therefore, has a lot riding on a successful production ramp of the Model 3.
For instance, Tesla is simultaneously building out its battery production capacity at its Gigafactory to produce enough batteries for up to 500,000 vehicles next year. If the battery factory is ready but vehicle production is lagging, Tesla could find itself in a very tough spot.
The immense pressure on a well-timed Model 3 production ramp-up is also evident by Tesla's soaring capital expenditures. During the first two quarters of 2017, Tesla management said it would spend between $2 billion and $2.5 billion in capital expenditures -- a huge jump from the $1.3 billion it spent during the entire year of 2016.
Investors should keep an eye out for Tesla's Model 3 news on Sunday.
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