Last week was a busy one for Tesla and its CEO Elon Musk. On Friday, the first 30 Model 3 units were handed over to their excited new owners — though one of them was Musk himself. And, while Musk already said that the coming months would be a “production hell” for Tesla to meet the 500,000 demand for the Model 3, he’s since updated the figure to an annual demand of over 700,000 units.
Musk mentioned that the updated demand during a conference call on Monday, at an investors meeting hosted by Goldman Sachs, where Tesla discussed raising $1.5 million in bonds to fund production. During the event, two sources confirmed to Electrek that Musk projects Model 3 demand to reach “700,000 units per year,” and could even go higher.
In order to meet this demand, Musk is considering moving Model S and Model X drive unit production from Tesla’s Fremont factory to the Gigafactory 1 in Nevada. The former, which is already capable of producing 500,000 units per year, could then focus on just the Model 3.
A Growing Demand
Musk also updated the average sale price for the new electric sedan. Previously pegged at $35,000 to $42,000, Musk told the investors that it’s going to be priced closer to $45,000. At any rate, the Model 3 is going to be both costly and beneficial for Tesla. Production will be tedious and expensive, which is why Musk is asking for investors to dedicate funding. The high demand, however, will obviously increase Tesla’s revenue. Musk believes, without a doubt, that Tesla’s up to the task.
This expected increase in Model 3 demand shows how autonomous electric vehicles (AEVs) are transforming the auto industry. As more nations and automakers are deciding to do away with combustion engines, the relatively-cheaper priced Model 3 could help in wide-scale AEV adoption. Experts already expect electric cars to dominate markets in the U.S. and in Europe in less than two decades. More vehicles like the Model 3 could translate to safer and cleaner roads and a future in which we are more capable of battling against the ongoing repercussions of climate change.