The Model 3 is planned to start below $40,000.
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Of course, some of the most talked-about Tesla features cost thousands of dollars, which makes them impractical for a moderately priced auto. “It is a smaller auto, and without as many bells and whistles as the Model S or X. But the goal is to have a very compelling, affordable, mass market electric vehicle and I feel pretty good about that goal”. The company also expects to deliver around 80,000 to 90,000 Model S and Model X cars in 2016.
Get out those wallets and make room in your garage: the Tesla Model 3 is coming.
Tesla’s cash reserves dropped to $1.2 billion as of December 31 from $1.9 billion a year earlier, despite a sale of shares last summer.
In the letter to shareholders, Chairman and Chief Executive, Elon Musk stated: “Achieving these results in 2016 should leave us well positioned for 2017, when we plan to launch Model 3 and take another significant step towards our mission of accelerating the world’s transition to sustainable transportation”.
Despite the problems with the X, sales of the Model S-which is made at the same Fremont, California, factory-jumped 76 per cent in the fourth quarter to 17,272. The Model X, for instance, finally began shipping late last year after a two year delay. The company said its Model 3 – with an estimated price of United States $35,000 or around half that of its best-selling vehicle – would be unveiled on March 31, with production and deliveries to start in late 2017.
UBS analyst Colin Langan said that, while Tesla’s forecast of positive net cash flow would “create a lot of excitement”, it did not tell the whole story because the company would draw from its $1 billion asset-backed loan.
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Furthermore, Tesla expects total deliveries of 80-90K in 2016, which reaffirms sales growth of 60%-80% and represents sales of about 1600-1800 cars per week. His stake in the business of more than a fifth means he has suffered a paper loss of approaching $2bn over the past year as Tesla’s shares have fallen. Tesla reported an adjusted loss of 87 cents per share in the fourth quarter, while analysts expected a profit of 10 cents a share, according to Thomson Reuters I/B/E/S. Revenues climbed 59% year over year to $1.75 billion but were slightly below the Zacks Consensus Estimate of $1.78 billion.
