Tesla Reaches 20,000 Unit Production Rate Annually for Model S

© Tesla

Big Milestone

Tesla keeps proving the skeptics wrong. For years we've heard all kinds of arguments explaining why they couldn't possibly succeed, and why they wouldn't deliver what they promised, how the auto industry was too hard to break into, etc. From the first promo pics of the Tesla Roadster in July 2006 to now, every time Tesla hits a new milestone, the naysayers go something like: "Well, they did this thing, but they won't get to this next thing." So I'll be curious to see what they'll come up with now that its been revealed that Tesla's factory has now reached its goal of producing Model S electric sedans at a rate of 20,000 a year, or 400 a week.

This is a big deal because economies of scale; that is, the more you make of something, the less it costs you per unit because you can amortize your fixed costs over more products and you have more bargaining power with your suppliers. This is a big part of Tesla's strategy. It'll also help clear their backlog of orders, which have piled up to around 13,000-15,000, and promise faster deliveries to new customers (some people might be deciding against the Model S because of the long waiting lists).

© Tesla

Another change is that so far, Tesla has only been making the more expensive top-of-the-line 85kWh model. It will now have the production capacity to start making 60kWh models too, filling some of those orders.

The company is also working hard on the Model X release, which should happen in mid to late 2014. Automotive News reports:

The Model X development is undergoing the transformation from the functional initial prototype that was unveiled last year to a production-ready prototype. The company will be making final decisions on the interior and exterior dimensions of the car in the first quarter of 2013, Musk said in an interview.

A key part of the Model X will be its dual-motor all-wheel drive system, which Musk predicted would give the crossover "the best road handling of any car in the world." (source)

And after that the next step will be a new model based on a third platform, closer in size to a BMW 3 and with a price around 30,000-35,000. This should be released in 3-4 years, and could be a major breakthrough for electric cars in my opinion, especially if the Supercharger network of fast-charging stations that provide free power grows all around the country and the world.

Via Automotive News, Green Car Reports

See also: 2013 Ford Focus Electric Gets Huge Price Cut

Tags: Electric Cars | Electric Vehicles

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