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Tesla is ramping up production to meet demand

Tesla has said it needs to ramp up production by a factor of 10 if it hopes to achieve its goal of making 500,000 vehicles a year.

Elon Musk, Tesla’s owner, has admitted the brand will have also to open a European production facility to meet future production targets.

The company has been hit with supply issues on its new Model X SUV ahead of its launch this year with 14,820 units delivered in the US, compared to its goal of 16,000.

The supply issues came as the company announced its plans to launch its first volume car, the £25,000 Model 3, which has already received over 325,000 expressions of interest. Existing Tesla owners will get priority on orders.

Tesla is currently taking £1,000 deposits for the new model.

The five-seat Model 3, similarly sized to an Audi A4, will have a range of at least 215 miles on a full charge, Tesla says, and will include its ‘autopilot’ safety features.

A spokesman for Tesla UK told AM its average delivery times for its Model S have not been affected, still being three months from the date of order.

He also said Tesla is not expecting a knock-on effect for UK Model X deliveries in the latter half of this year.

Last year sales of Tesla’s Model S executive saloon reached 50,580 units. This year the brand aims for more than 80,000 combined sales of Model S and Model X.

Tesla believes it can meet its production challenge with the help of its Gigafactory which opens next year. It will help Tesla to manufacturer the batteries used in its vehicle range with the company claiming it will produce ‘more lithium ion batteries annually than were produced worldwide in 2013’.

The electric car brand has ramped up production from 3,100 cars in 2012 to 50,000 cars in 2015.

The Tesla spokesman said: “By 2020, the Gigafactory will reach full capacity. Currently we are ahead of schedule with the launch schedule for the Gigafactory.

“We recognize that everyone wants to get their Model 3 as quickly as possible. Our overarching goal is to maximize total customer happiness within the bounds of what is physically possible.”

Production on the Model 3 will start in late 2017 and deliveries for North America will start first. Right-hand UK deliveries are expected in 2018.

Tesla currently has 14 sales and service centres in the UK. They are all wholly-owned by Tesla and the brand does not operate with franchisees, instead opting for a direct sales model.

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