Elon Musk says Model 3 needs 'fully operational' Gigafactory

'Smaller And Lower Cost Sedan' Still Two Years Away

Before Tesla can build the all-electric Model 3 – its upcoming "smaller and lower cost sedan," as CEO Elon Musk put it in a Tweet – the automaker needs a "fully operational Gigafactory." That's the big reason why, even though we will see what the Model 3 looks like in March 2016 and preorders will start then, no one will be able to buy one until some time in 2017. The Gigafactory, Tesla huge new battery plant, is being built to make the battery packs for Tesla's future vehicles and Musk has said that it will reduce the cost for those lithium-ion packs by more than 30 percent. If you want to make a lower-cost EV, you're going to need cheaper batteries.

Of course, Tesla's own timeline for the Gigafactory show that it will not actually be "fully operational" until 2020. That's the year Tesla has said the first such plant will be churning out 50 GWh of annual battery production, to be used in Tesla EVs and the company's Powerwall home energy storage systems. Apparently, whatever production rate the Gigafactory will be able to handle in 2017 will be enough to get the first batch of Model 3s out the door.

So far, all that we've potentially seen of what the Model 3 looks like is (maybe) in this faraway screen shot from the Australian 60 Minutes program. While some have pointed to Tesla's inability to stick to its own timelines as a reason to expect a delay in the Model 3 launch, Tesla remains steadfast that production will start in 2017. Musk's Tweet reinforces that schedule.

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