Model 3 Rollout Will Prove Whether Tesla Can Manufacture At A High Rate of Speed

Tesla (WN)  reiterated on Wednesday a bold production schedule for its mass-market Model 3 sedan, a new model whose success analysts said is crucial to the company's current stock price.

On a call with analysts following the company's quarterly earnings release, CEO Elon Musk said the electric carmaker is expected to reach a volume production rate of 5,000 Model 3s per week in the third quarter and 10,000 per week in the fourth quarter.

In answer to an analyst's question, Musk conceded that a new stamping press needed to produce Model 3 parts at the assembly plant in Fremont, Calif., hadn't been delivered yet and would need to be debugged. In other words, just a few months prior to volume production, the new model's assembly line still hadn't been built.

Still, Musk's optimism is nothing if not contagious. He said during the analysts' call that "the question is really how long does it take to work out the bugs in the stamping line? And how many iterations does this one have to go through to get it operating smoothly? But it'll all be here and it'll be a hive of activity, and I'll be personally down there looking at the line as I was with the Model S line and I'm confident that I don't think that's going to be an issue."

Shares of Tesla fell 6% on Thursday to $257.44. The stock has risen more than 20% since the beginning of 2017.

***The Tesla Model 3 Ascendancy***

The Chevrolet Bolt is General Motor's answer to the entry level Tesla EV. Some units have already begun rolling out, and they are being sold for $37,500. The amount is slightly more expensive than the Model 3's $35,000 price tag, but the Bolt will have longer range: 238 miles to the Tesla competitor's 215 miles.

Now, GM claims that the demand for Bolt is healthy, but no preorder figure has been released so far. What we know, however, is that reports indicated GM will make just over 30,000 Bolts in 2017. The Tesla Model 3, on the other hand, has a backlog of preorders, and the number has zoomed past half a million already.

The consensus is that the Model 3's popularity is attributed to its mainstream pricing and its fidelity to the sleek Tesla EV design. This could now change after BMW i5 enters the picture.

***BMW i5 vs Tesla Model 3***

A recent report has outed the BMW i5, which is slated for 2021 release. It will pack serious EV technology such as a level 3 autonomous driving, which would allow the vehicle to have full control of all functions.

"We're going to see what we believe to be the first full autonomous capability," Ian Robertson, board member at BMW, told Auto Express. "We've assembled quite a powerful group, so putting these big companies together with this company we own [Here] is giving us a powerful move down the autonomous road."

***Striking Design***

One notable aspect to the BMW i5, however, is its striking design. It is sleek with looks that closely follows the BMW aesthetic tradition. According to Robertson, it will allow people to recognize that the i5 is a BMW car without seeing the company's badge.

When it was first leaked back in 2015, the concept car has been touted for its resemblance to the Toyota Mirai. By looking at the vehicle's front side, one will recognize that this is no longer the case.

The i5's design credential are burnished by the grille, light treatment, and the graceful lines that all constitute a significant departure from the appearance of the BMW i3 and even improved on the sporty vibe of the hybrid BMW i8.

At this point, there is still no word about pricing, but the i5 is expected to directly compete with the Tesla Model 3, which should mean it would cost below $40,000.