Tesla’s Musk hands over first Model 3 electric cars to early buyers

Tesla Chief Executive Officer Elon Musk said on Friday the Model 3 had over half a million advance reservations as he handed over the first 30 to employee buyers, setting the stage for the biggest test yet of the company’s strategy to become a profitable, mass market electric car maker.

Outside Tesla’s Fremont, California factory, Musk showed off the $35,000 base vehicle with a range of 220 miles (350 km) on a charge that marks a departure from the company’s earlier luxury electric cars.

Musk took to the stage driving a red Model 3, and said Tesla has produced 50 of the vehicles so far, including 20 for testing purposes.

Hours before the event, Musk acknowledged it would be “quite a challenge” to build the car during the early days of production.

“We’re going to go through at least six months of manufacturing hell,” Musk told journalists.

The over half a million reservations are up from about 373,000 disclosed in April 2016. Customers pay $1,000 refundable deposits for the car, which is eligible for tax credits.

Any new buyers would likely not receive their car until the end of 2018, Musk said.