The Tesla Model 3 did hit the “pencils down” mark, CEO Elon Musk said during the Gigafactory media tour.
Musk told reporters that the final designs for Tesla’s $35,000-and-up electric Model 3 were locked up two weeks ago. Tesla is moving forward on schedule to start producing them next summer, he said.
Speaking at the Code Conference in early June, Musk had said that all the Model 3 design was expected to be done, “pencils down,” in about six weeks, and that other ideas for “future cool things” would go into version 2 or version 3. It looks like the Tesla team was able to meet that goal.
The Model 3 will start production about six months earlier than anticipated. During the Code Conference, Musk predicted the mass-market $35,000 electric sedan would start production by the end of 2017. On Tuesday, he announced the Model 3 will start being built in the summer of next year.
Musk, along with Chief Technology Officer J.B. Straubel and Panasonic executive Yoshihiko Yamada, had other insights on the future of Tesla’s electric models and battery packs, during the Gigafactory media tour.
Musk said he’s confident the company will reach a price of $100 kilowatt hours by 2020, down from an average price of $1,200 in 2010. With batteries making up a third of the price of an electric car, that will play a big part of keeping the Model 3 cost competitive.
Cheaper materials, a shorter supply chain, and factory automation are why battery costs are falling, according to the three executives. Buying at Gigafactory scale lowers the procurement costs of raw materials such as lithium. Supply chain costs are also dropping as Tesla and Panasonic will be building components in-house instead of the usual costs shipping and repackaging.
The three executives threw out other intriguing facts and forecasts about the Gigafactory for media coverage. Tesla is cutting out all fossil fuels from the factory process including cutting the natural gas line leading to the battery factory and getting rid of the diesel generator for backup power. It will be net zero for energy, powered mostly by onsite solar backed with batteries.
This may not be the only Gigafactory out there. Musk thinks that future Gigafactories will be necessary, combining all stages of production from battery cell production to finished cars. You can expect to see battery plants in Europe, China, and possibly India, he said.