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First Tesla Model 3 deliveries coming July 28 says Musk

CEO claims production of its most affordable car to ramp to 20,000 a month by December.

2018 Tesla Model 3
Tesla Motors, screenshot by Antuan Goodwin/Roadshow

Tesla Model 3 wait-listers, listen up: The first 30 production examples of the Silicon Valley automaker's most affordable model ever will be handed over to customers on July 28.

That's according to Tesla CEO Elon Musk, who claims in a series of tweets that the "Model 3 passed all regulatory requirements for production two weeks ahead of schedule." Musk says the company is expecting to build SN1 -- the first production Tesla Model 3 -- on Friday.

More important than the first 30 customer deliveries is Musk's dramatic projected production ramp-up, which he says should reach 100 cars in August, accelerating to "above 1500" in September. Musk says, "Looks like we can reach 20,000 Model 3 cars per month in Dec." 

If that hockey-stick production curve comes true, it would be welcome news for Tesla, which has historically been dogged by repeatedly delayed new product launches. The company's most recent new vehicle, its Model X crossover SUV, has been markedly slower out of the sales gates than its Model S five-door hatchback, and both product lines have been bedeviled by quality problems. 

Musk has said previously that the company is planning to build some 500,000 vehicles a year in 2018, an ambitious target many industry watchers have questioned. Greatly simplified build combinations and streamlined production methods for the Model 3 are understood to be at the heart of a drive for increased quality and reliability. 

Despite around 400,000 eager customers plunking down $1,000 refundable deposits since the vehicle's April 2016 announcement, complete Model 3 pricing remains unknown. The range is expected to start at $35,000 before extras, and industry watchers believe the Model 3's order sheet will eventually include pricy options like a second motor for all-wheel drive, as well as larger-capacity batteries for improved range and performance. 

In the short term, however, initial Model 3 customers are likely to have a much simpler ordering process. At a shareholder meeting in March, Musk noted, "I should say that we've kept the initial configurations of the Model 3 very simple," so early customer selections may only consist of things like wheel pattern, paint and upholstery colors.

The Model 3 is absolutely pivotal to Tesla's future prospects, and in turn, its stock price. The company's valuation has long defied the critics, recently rising to a market cap above that of luxury automaker BMW -- despite never having turned a profit. The company had already passed the market caps of General Motors and Ford. Tesla will need to delivery the Model 3 at scale and at a quality level heretofore unforeseen in its cars in order to maintain its impressive valuation and make good on Musk's ever-ambitious plans for the future.