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Tesla wants to make up to 200,000 Model 3s in the second half of 2017

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On Tesla's earnings call this afternoon, Elon Musk spent most of his opening comments talking about improving manufacturing, which is becoming an urgent priority for the company as it faces the task of increasing vehicle production five-fold or more to accommodate Model 3 reservations — just as it takes heat over early quality issues with the Model X. "Tesla is going to be hell-bent on becoming the best manufacturer on Earth," he said, imploring "the best manufacturing people in the world" to "join our company."

Part of that is a bold plan announced today to make 500,000 cars in total by 2018, two years faster than Tesla had previously planned. To that end, Musk said that the company is looking for the Model 3 to be at "production capability" by July 1st of next year, acknowledging in the same breath that the date likely will not be met but that "there needs to be penalties internally or externally for anyone who doesn't meet that timeframe." "We need to hold peoples' feet to the fire," he added.

"My desk is at the end of the production line."

Incredibly, Musk said that they're targeting 100,000 to 200,000 Model 3s made in the second half of 2017, which would represent an extraordinary boost over the company's current production capability; right now, it just wants to be able to make 2,000 cars per week by the end of the second quarter. Musk said on the call that if you want a Model 3 in 2018 — shortly after its targeted late 2017 market launch — you should place a deposit soon.

Again, all of this comes down to Tesla figuring out how to scale manufacturing in a way that it's never had to do before. "I have a sleeping bag" in an office in the factory, Musk said. "My desk is at the end of the production line."