2017 Tesla Model 3 production will be much lower than anticipated, analyst claims

The release schedule surrounding Tesla’s Model 3 is nothing short of ambitious, with the company still maintaining that deliveries will begin in late 2017. With construction on the Gigafactory still ongoing, Tesla says that it began building Model 3 prototypes about 6-7 weeks ago. Additionally, Tesla last month publicly stated that “Model 3 vehicle development, supply chain and manufacturing” remain on track “to support volume deliveries in the second half of 2017.”

At the same time, Tesla hasn’t wavered from its touted $35,000 price point, an attractive entry point for Tesla and EV fans who aren’t in a position to fork over upwards of $80,000 for the company’s flagship Model S. Of course, with such a low price point, the Model 3 won’t exactly be a carbon copy of the Model S. Recently, Musk relayed via Twitter that the Model 3 will not ship with a traditional dashboard while adding that the “Model 3 is just a smaller, more affordable version of [the] Model S w less range & power & fewer features.”

Now if all goes according to plan, the Model 3 will begin shipping in just a few short months at a reasonably affordable price. However, Tesla doesn’t exactly have the best track record when it comes to meeting delivery deadlines, a fact which Model S and Model X buyers have learned the hard way in recent years.

Having said that, Morgan Stanley analyst Adam Jonas — the financial firm’s point man on all things Tesla — recently appeared on Bloomberg TV and said that Tesla may not only miss its stated 2017 production goals with the Model 3, but that the $35,000 sticker price may, in effect, be significantly higher.

“Our forecasts are much more conservative than the company’s forecast both this year and next,” Jonas said in remarks transcribed by Forbes. “We expect this vehicle to go into a kind of soft launch mode into the fourth quarter this year and our forecast is for 2,000. Not 20,000. Not tens of thousands…delivered at the end of this year. The point of this is just to have those initial deliveries done to get the data and the initial feedback from the community.

“Next year,” Jonas continued, “we’re at about 80,000 units. Yes, they’ve talked about 400,000…that kind of pace of production. We are nowhere near that. Even if you go out a few more years to 2020, our numbers are less than half, maybe a third of what management is implying that they can do. In spite of that, we are constructive on the investment.”

That’s quite the hot-take on Tesla’s ambitious production goals. Indeed, Tesla is still aiming to manufacture 500,000 vehicles in 2018 alone. As a point of comparison, Tesla in 2016 delivered 76,230 vehicles to customers across the globe.

As for the price, Jonas and his team believe the average transaction price of a Model 3 will fall in the $60,000 range once users “spec up” the car with features like enhanced range and Autopilot capabilities.

This past Friday, Musk published a video of the first Model 3 release candidate going for a drive.