The third quarter was a fundamental turning point for Tesla as we successfully transitioned to a mass production car company, growing from manufacturing 5 cars per week at the beginning of the quarter to 100 cars per week by the end. That rate has doubled since last month and is now at over 200 cars per week or 10,000 cars per year, which is at the critical threshold needed for Tesla to generate positive operating cash flow. One month from now, we expect Tesla to double production again and achieve the target rate of 400 cars per week or 20,000 per year. Despite many short term costs associated with the ramp, Tesla nonetheless expects to get approximately halfway to the 25% gross margin target by end of year.
Tesla’s Supercharger Network: Changing the Game
In September, we unveiled our Supercharger network. Our internally developed and manufactured Supercharger is substantially more powerful than any charging technology to date, providing almost 100 kilowatts of direct DC power to Model S. This enables Model S owners to regain up to 165 miles of range in 30 minutes with the 85 kWh car, about the time needed for travelers to refresh or grab a meal. This marks an inflection point in electric vehicle convenience for long distance traveling. Our initial Supercharger network already covers all common long-distance routes in California, enabling convenient and free driving throughout the state, as well as to Las Vegas or Lake Tahoe. East coast travel all the way from Boston to Washington, DC, will be enabled next month. Recently, one of our Los Angeles based customers was so excited to take delivery of his Model S that he hopped on a plane to our factory in the San Francisco Bay area, took delivery of his car and used the Supercharger network to cover almost 400 miles needed to get back home, all in the same day!
Over time, all Superchargers will be equipped with a solar panel canopy, enabling Tesla to provide electricity for long distance travel at negligible marginal cost. This enables us to offer free, unlimited access to the network. For the first time, recharging our cars can be done at zero cost to the driver and the environment! This can save a Model S owner thousands of dollars over their ownership period.
We are planning to methodically expand the Supercharger network. By the end of next year, we plan to install Superchargers in high traffic corridors across the continental United States, enabling fast, free, purely electric travel from Vancouver to San Diego, Miami to Montreal and Los Angeles to New York.