Model 3 — Tesla’s mass-market auto priced at $35,000 — is scheduled for delivery in the latter part of this year. Up until this point, however, there are still a lot of doubts about the company’s capability of making good on this promise. That’s in spite of the fact that compared with their Model X SUV, it should be much easier to build their Model 3 Sedan. Aside from having a simpler and less fancy design, Tesla’s manufacturing process should be more streamlined by now, provided they took advantage of and acted on the lessons learned from the production hardships they experienced with Model X.
Plus, there’s also this critical motivating factor — Model 3 has to be a success because Tesla is expecting it to be its bestselling car, the one that hopefully will bring in majority of their profit. Equally important is this: delivering the Model 3 will serve as some kind of vindication for CEO Elon Musk who has long vowed to help change the world by making an electric car that everybody can afford.
If Tesla Motors (NASDAQ:TSLA) can deliver on time, there’s a better chance that more people will be encouraged to place their own orders for the Model 3. And if millions more are sold, then Musk’s promise to fill our highways with sustainable transport in order to help slow down the effects global warming will become more realistic to attain. Musk’s goals are truly noble and everything else aside, we wouldn’t mind seeing Tesla succeed on these fronts.
And because we know that Tesla has moved on from more than just being an auto maker, it’s reasonable to expect that they will have to make significant progress in their other endeavors too, namely, their battery factory in Nevada, and their solar power producer.
Following the merger with SolarCity late last year, Tesla stopped being a mere battery supplier for solar rooftop installers. They are now considered a full-fledged solar power provider. And this is something they have to get right, especially now that they have a complete say on everything that will comprise the solar powered system — from the materials, to the design, and the pricing. It’s a product they are calling the ‘solar roof‘, one that will transform one’s entire roof into one big solar panel. It’s another invention that’s consistent with Musk’s desire to help address climate change. And if it pans out, Tesla will have more funds coming in to support their Model 3 production.
Which brings us back to Model 3. All of Tesla’s other undertakings are likely to take a backseat to the main character in their story – the sensational Model 3 and the big question on when it will actually be on our roads. The fate of Tesla will likely depend on what the answer to this question will be.
Tesla Stock Action
Tesla Motors, Inc. is up $1.86 to $215.55 in pre-market trading today. The issue currently prints a one year loss of about 11 percent. The Palo Alto, California-based company, which in the past 52 weeks has traded between a low of $141.05 and a high of $269.34, had a market cap of $34.91 billion as of Tuesday’s close.