The demand for the Model 3 is so strong, that TSLA had to move up the production schedule for 500,000 cars to be produced by 2018.
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Extremely strong demand for Tesla’s Model 3 – a $35,000 sedan unveiled in March and meant to be Tesla’s first mainstream auto that has booked more than 400,000 pre-orders – is partly behind the production ramp up. Unveiled March 31 with a starting price of around $35,000, the Model 3 will be Tesla’s most affordable vehicle ever.
The analyst rates Tesla shares at sector perform, and raised his price target to US$252 per share from US$180. The upcoming mass-market auto is far less complicated to manufacture than the Model S and Model X. But even if one component supplier fails to meet expectations, the company will fabricate the parts itself at the Fremont facility, said Musk. It also said that it is on target to make 80,000 to 90,000 overall vehicle sales in 2016.
Tesla’s founder Elon Musk has never previously managed to hit any of his production deadlines. But on Thursday, Musk and Chief Financial Officer Jason Wheeler said in their letter to shareholders they now anticipate spending about $2.25 billion this year, up from a previous forecast of $1.5 billion.
Tesla said more than 325,000 people put down a US$1,000 deposit to reserve the vehicle in the first week after the unveiling.
On Wednesday, the electric carmaker reported its quarterly loss at $283 million while its revenue jumped 22 percent to touch $1.15 billion.
Musk said customers should order now if they want to receive their auto in 2018. Its loss for the same period a year ago stood at $154.2 million.
Tesla also indicated that orders for its Model S vehicle have risen 45 per cent year-over-year, with a 160 per cent increase in Asia.
Baird Equity Research analyst Ben Kallo wrote the company is still working through some production and quality issues with the Model X SUV, but he believes the company has improved its quality control. He continued by saying production tooling for Model 3 will be ready by April 2017, with validation taking place through July.
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The company said Model X prices – which start at about US$80,000 – were about 30 percent higher than for the Model S.
