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Tesla optimistic of volume Model 3 deliveries in 2017, production to rise five-fold in 2018

| Dec 03, 2016 12:31 PM EST

A view of a Tesla showroom on April 4, 2016 in Corte Madera, California.

The upcoming $35,000 Model 3 will be very important for the Tesla Motors, as it will be decisive for the success of the electric car manufacturer. Apparently, Tesla has put the company on bet with its plans to make thousands of Model 3 vehicles and by heavily investing in the construction of its Gigafactory simultaneously.

Considering the integral role Model 3 in controlling Tesla's stock, it's vital for investors to take into account what the management says about the vehicle prior to its launch in the latter half of 2017, Fox Business reported. For instance, a recent statement by the company regarding the dedication of its suppliers for the Model 3 project has made the stakeholders believe that the maiden market vehicle of Tesla will be a resounding success.

During an earnings call in October 2016, Tesla CFO Jason Wheeler and CEO Elon Musk talked about the willingness of the suppliers to work with Tesla for the Model 3 program. "We are actively looking to increase terms with suppliers, and I think as our production has been more predictable, our suppliers have been much more open to that conversation," Reuters quoted Wheeler as saying.

An excited Musk told the conference that they saw an extremely strong supplier commitment and there is no deficit in supply commitments. The agency further quoted Tesla CEO saying that this is "the most interesting vehicle program;" perhaps the most interesting product program worldwide. He believes that this is one reason why suppliers actually desire to be a part of such a massive program.

Perhaps the investors are especially interested in the company's competence in executing the program well as far as logistics and supplier relationships are concerned. Earlier, Tesla had to hold back the initial production of Model X due to these issues soon after the vehicle was launched in late 2015.

While it was known that Tesla was preparing to deliver the Model 3 sometime in late 2017, now the management appears to be very confident about the success of the program. The company has already said that volumes of Model 3 will be delivered during the second half of 2017.

In its recent quarterly shareholder letter, Tesla has asserted that the construction of Gigafactory as well as the development of Model 3 are both on their plans to ensure volume production of Model 3 and the vehicle's delivery in the second half of 2017. The company now expects to increase its production from the existing annual rate of 100,000 units to a whopping 500,000 units in 2018.

Tesla unveiling Model 3, watch below:

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