Tesla Says It Will Sharply Ramp Up Production of Model 3

DETROIT — Tesla Motors said on Wednesday that it was confident it couldaccelerate production to meet high demand for its forthcoming Model 3electric vehicle, despite the departure of two top manufacturing executives.

The carmaker’s chief executive, Elon Musk, said that Tesla expected toproduce a total of 500,000 vehicles by 2018, two years sooner thanpreviously announced.

The goal represents a huge leap from Tesla’s production of about 15,000vehicles in the first three months of this year. But Mr. Musk expressedconfidence that the company could meet the ambitious target, and beginfilling more than 325,000 orders for the Model 3 by late next year.

“I think we have done a good job on the design and technology of ourproducts,” Mr. Musk said in a conference call with analysts. “The big thingwe need to achieve in the future is also to be the leader in manufacturing.”

The expansion will take place without the help of Greg Reichow, Tesla’s vicepresident for production, who is taking a leave of absence after five yearswith the company. Also leaving the company is John Ensign, who had beenvice president for manufacturing since 2014.

Mr. Musk, who said he was recruiting new manufacturing executives, gaveno reason for the unexpected departures.

“We’re confident that with the strength of the team, high-qualitymanufacturing at Tesla will continue,” he said.

The company said Mr. Reichow would assist in the transition.

“My belief in Tesla’s ability to successfully deliver great cars and inspire theworld to drive electric remains as strong as ever,” Mr. Reichow said in astatement released by the company.

Tesla has had to confront quality concerns about its Model X sport utilityvehicle, including a recall last month of all 2,700 vehicles to repair a latchthat prevents rear seats from folding forward in a collision.

Mr. Musk did not share details of how Tesla would increase vehicleproduction, but he said in a letter to shareholders that the move “will likelyrequire some additional capital” to finance the expansion.

The company is also building a major battery plant for its vehicles inNevada, and expects to produce its first battery cells there by the end of thisyear.

An expansion is necessary to meet the extraordinary demand for the Model3, which will be the company’s first electric vehicle aimed at mass-marketconsumers.

With a price of about $35,000 and a battery range of more than 200 miles,the Model 3 has generated enormous interest from potential customers.Tesla has received $1,000 deposits for more than 325,000 vehicles.

One industry analyst said converting all the orders into sales could be adifficult task, particularly if new electric cars from other automakers hit themarket before the Model 3.

“While pre-orders suggest demand could be there, with recent executivedepartures and more competitive offerings, this may be tough to achieve,”Efraim Levy at S&P Global Market Intelligence said in a research note.

Mr. Musk reiterated earlier forecasts that Tesla would sell up to 90,000Model X S.U.V.s and Model S luxury sedans this year.

For the first quarter, Tesla reported wider losses, but larger revenues, thanin the same period in 2015. The company said that it lost about $283million, on revenues of $1.15 billion, in the first three months of this year.During the same period last year, it reported revenues of about $940million and a loss of $154 million.