Tesla CEO Elon Musk Teases New Model Y, Model 3 Details

At Tesla's annual shareholder meeting Tuesday, chief executive Elon Musk confirmed the production schedule for the new Model 3, the company's entry-level auto priced at $35,000 (roughly Rs. 22.5 lakhs), and offered a glimpse of a future sport-utility vehicle, the Model Y.

Tesla is set to begin production of the Model 3 next month. Buoyed by its mass market appeal, Tesla hopes to produce half a million electric cars by 2018, vastly ramping up its output over last year, at 85,000 vehicles. Early customers can choose the car's color and the size of its wheels, Musk said. But as production accelerates later this year and into 2018, additional configurations will become available. Model 3 customers eventually will be able to choose between two motors, one designed for highway travel and the other for stop-and-go traffic, optimizing for acceleration and mileage economy.

Demand for the Model 3 isn't slowing, Musk said. Customers who reserve one now won't see their vehicles until late next year.

Tesla Model 3 May Not Come to India in 2017 or 2018

Based on Tesla's previous estimates for the release of the Model 3, the company is slated to deliver the first configuration of the car on time. But Tesla has been beset by production delays in the past. The company shipped fewer of its Model X vehicles last year than it planned, citing supplier issues and an overly ambitious timeline. At the shareholder meeting Tuesday, Musk said the limited configuration options available for the first round of the Model 3 should help streamline production and get the first round of cars on the road.

Some analysts praised the approach. But others are skeptical that Tesla can sustain demand and profitability on its autos. Brad Erickson, a research analyst at Pacific Crest Securities, said Tuesday that he has "major reservations" on Tesla's stock, underpinned in part by the Model 3's ability to turn a profit.

Meanwhile, Musk also offered the first glimpse of the Model Y, which is scheduled to hit the road by 2019. He said that demand for the Y is exceeding that of the Model 3.

Separately, Tesla plans to show off a prototype of a semi-trailer truck in September.

"We've shown it to a number of organizations that buy heavy-duty trucking, and they all love it," Musk said. "They just want to know how many can they buy and how soon."

Teasing the audience, he then said: "I'd really recommend showing up for the semi-truck unveiling. Maybe there's a little more than we are saying here."

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