Elon Musk says USD 35,000 Model 3 to reach volume production mid-year

Tesla Inc Chief Executive Officer Elon Musk said on Monday production of the USD 35,000 version of the electric car maker's Model 3 will start this month, but would not reach “volume production” until mid-year.

"Gap in understanding is that USD 35k Model 3 production *starts* this month, but will not reach volume production until mid-year. Extremely difficult to predict middle part of manufacturing S-curve," Musk said in response to a tweet here.

It was not immediately clear what Musk meant by “volume production”. Tesla did not respond to a request for comment.

The launch of the USD 35,000 version, Tesla’s cheapest model, last week comes at a crucial time for the company as some analysts had raised concerns that demand for the higher-priced versions of the Model 3 was beginning to dry up in the United States, especially after a federal tax credit was cut in half this year.

Tesla also said last week its global sales would now be online-only, in a bid to cut overhead costs.