Preparation For Car Production To Begin Feb. 20

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Tesla recently announced it will temporarily shut down production at its California assembly facility this month in order to brace for production of the Model 3 sedan.

Company Chief Executive Elon Musk told investors past year that there were over 370,000 customers who gave deposits for the Model 3 sedan, so he planned to start manufacturing the vehicles in July 2017.

"We want to own Tesla ahead of the Model 3 production ramp as Tesla has historically seen positive share movement in the six months preceding the introduction of new vehicles", wrote Baird's Ben Kallo. The affordable electric auto is expected to begin full production in July, but unless Tesla has some seriously futuristic engineering tips up its sleeve, that date might be a little optimistic.

"What better way to stoke the fan base and Wall Street than to wheel out pre-production models", a Tesla exec said.

The Model 3 is expected to sell at a starting price of US$35,000 before incentives, with production slated to begin in the middle of this year.

During the production stoppage, Tesla will perform general maintenance and add capacity to its paint shop. The company has already pushed back its fourth quarter earnings call to February 22, two days after planned production. This is line with a warning from Musk as well, as he told investors previous year that there was a possibility of the delay with its July 2017 production target.

For those unaware about the specifics of the cheapest Tesla vehicle shown off earlier in 2016, here's a recap to jog your memory. The company stated that it meant to produce at least 500,000 cars from 2018 itself rather than waiting till 2020.

Further, the post stated that Tesla's factory environment is conducive to injuries and that the company is paying salaries near the lowest in the automotive industry. Many analysts remain skeptical that Tesla will be able to pull off its lofty production goals, but announcements such as these are an indication that plans are moving forward.

This is the reason they have been given most of the time in getting this model to completion.

Take that with a grain of salt, however, as a source told Reuters last week that designs were still changing, which could delay production. I don't want to sound like I'm minimizing the company's accomplishments - it shipped 1.64x more vehicles in 2016 than 2015 and that's a substantial improvement by any measure.

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