When Tesla first revealed the Model 3, CEO Elon Musk promised first deliveries in the fourth quarter of 2017. While the project could still be on its original timeline, Tesla’s annual 10-K filing with the U.S. Securities and Exchange Commission (SEC) on March 1 revealed an interesting detail about the state of development of Tesla’s Model 3 program: that it has yet to complete a beta prototype vehicle.
From the filing: “We expect that the next performance milestone to be achieved will be the successful completion of the Model 3 Beta Prototype, which would be achieved upon the determination by our Board of Directors that an eligible prototype has been completed. Candidates for such prototype are among the vehicles that we are currently building as part of our ongoing testing of our Model 3 vehicle design and manufacturing processes.”
In other words, Tesla has not “completed” a Model 3 “beta prototype” as of, well, either of these two dates: December 31, 2016 (the period that the SEC filing covers), or March 1, 2017 (the date on which the document was filed). Pick your poison.
Some of this comes down to semantics. Tesla also implies that it has completed an “alpha prototype” of the Model 3. What’s the difference between an “alpha prototype” and a “beta prototype” in Tesla’s definition of the language? Only Tesla knows
Tesla showed the Model 3 at an event on March 31, 2016. There were three cars on stage, two of which were actually drivable—the black and silver ones. A third car—the red one—was a shell on a wooden frame. Tesla gave rides to media and fans, in what were then called design prototypes by company representatives, and those two cars have been seen around California and Nevada numerous times since.
Were those two cars from March 31, 2016, considered the “alpha prototypes”? It now sounds plausible.
We know that around mid-February 2017, Tesla is said to have started building the next stage of Model 3 prototypes. It is from this batch that they appear to be creating the first “beta prototype.”
What does this mean for production? In theory, there is nothing that prevents Tesla from delivering what a normal car company would call a prototype test vehicle of some sort and simply declare victory on its original timeline. This is what Tesla did for the Model S in June 2012 and for the Model X in September 2015. After those events, it took at least another approximately three months—arguably a fair bit more—for proper volume production to take root.
That is to say that, no matter how immature, Tesla could indeed deliver a Model 3 in July 2017 and declare victory. However, that is not to be confused with what a normal car company would call its start of sales to the general public.
Tesla has matured a lot since the Models S and X, and it can no doubt develop the less complex Model 3 faster than it did with the S and the X. That said, there are limits to everything, and there is less room for error in durability testing and overall quality with this mass-market entry.
Basically, it comes down this: If it’s prudent to start production of an all-new car three to six months after the advent of a “beta prototype,” then why don’t all automakers do this? Why do they take approximately two years for the preproduction testing stages, if only three to six months are necessary?
We will find out in the second half of this year.