The Model 3 is Tesla's biggest gamble yet

Tesla Model 3Tesla MotorsTesla Model 3

The newly unveiled Tesla Model 3 spells out a fresh chapter in the electric car maker’s evolution, but it won’t be without risks.

Despite all of its innovation, Tesla’s room has often been crowded out by a pretty big elephant: timing. Whether Tesla can bring a production version of the Model 3 to market on schedule in late 2017 remains to be seen.

All of Tesla’s previous vehicles — the Roadster, the Model S and the Model X SUV arrived late, for various reasons.

During the unveiling on Thursday night, CEO Elon Musk expressed his hopes that the Model 3 would meet its target production date, while adding a slight caveat (emphasis ours): “I do feel fairly confident that it will be next year,” he said.

People want these cars — badly

Demand for Teslas has always been high, but now it’s officially gone through the roof. If Model 3 preorders are any indication, the automaker has a hefty workload on its hands.

In the 24 hours leading up to the debut, Tesla took more than 125,000 preorders worldwide, at a time when the company operates two engineering and manufacturing facilities in California, and another plant in the Netherlands.

Those Model 3 orders will multiply exponentially between now and the latter half of 2017.

And that doesn’t take into account the slate of orders Tesla already has for the Models S and X.

Building the cars

Musk argued that the Fremont factory, which produced various General Motors and Toyota vehicles in the past, is capable of cranking out about 500,000 vehicles per year — and that’s the target Tesla wants to hit by 2020.

Tesla currently builds its Model S and Model X in that plant, though not quite in those six-figure quantities. The company tends to sell every car it builds, and in 2015, it delivered just over 50,000 vehicles, which was the low-end of its 50-to-55,000 unit goal.

Still, Musk seemed hopeful that his company could reach a 500,000 annual target in the next three and a half years. “That’s going to be — I wouldn’t say straightforward, but very doable,” he quipped.

Bob TregilusConstruction site of Tesla’s new ‘gigafactory’ near Reno, Nevada.

Making the batteries

Tesla’s Gigafactory plays a significant role in its quest for high-volume production.

The Reno-based battery plant will “produce more lithium-ion batteries than all other factories in the world combined, in just one location.” Musk claimed.

The facility, which the CEO says is already operational, sets the stage for Tesla to meet the ravenous demand for its full lineup of cars — as long as everything goes according to Tesla’s “Top Secret Master Plan.”

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