According to Elon Musk, the much-anticipated Tesla Model 3 will roll off the assembly line on Friday. Musk announced the news on Twitter. The first 30 units will be presented to their new owners on July 28.
Although the Model 3’s production began two weeks earlier than Tesla had planned, investors were not necessarily cheered; the company’s stock price was down 9 percent by the time the markets closed for the Independence Day holiday. Musk has long been effective at building hype for Tesla, but at this point the markets suggest excitement over the Model 3’s production has already been built into the Silicon Valley company’s share price. Tesla’s deliveries were also flat during the second quarter of this year, further worrying investors.
Nevertheless, the company’s stock is up well over 60 percent this year, and with a valuation of over $60 billion, the company is worth more than any of the U.S. Big 3 automakers. But the company's record of falling short of expectations means the automotive press is not ready to talk about a "Big 4" automaker club, which would include Tesla, quite yet.
Even though the company generates as much doubt as hype, the Model 3 is still one of the most anticipated vehicles in automotive history. Tesla says at least 400,000 people have paid $1,000 to reserve the right to purchase the Model 3. A reservation made now means that Model 3 will not be delivered until at least mid-2018. Priced at $35,000 before any tax incentives, the five-seater electric car promises a range of 215 miles and can accelerate from zero to 60 miles per hour in six seconds.
Despite the potential that the Model 3 has to allow for electric vehicles to finally become “mainstream,” many industry analysts are still skeptical that Tesla can deliver the copious amount of cars it has promised to future customers. The company’s Model X and Model 3 have been widely lauded for their design, safety and performance, but those are niche vehicles targeted for early adopters and wealthier car owners. But a mass-production car has far different assembly requirements than a luxury vehicle. Now Tesla will have to prove that its operations can meet mass production-level demand.
Musk is bullish on Tesla’s capacity, however; he said production of the Model 3 will increase “exponentially,” with 100 cars next month, 1,500 in September, and 20,000 a month by the end of this year.
At least one analyst believes Tesla is in an enviable position compared to other automakers. The auto industry is currently stagnant; despite largely positive macroeconomic trends, low unemployment and the cheap cost of gasoline, sales of new cars fell 3 percent last month. Tesla, meanwhile, could harvest a new consumer base.
James Albertine, an automotive analyst, told CNBC's Squawk Box earlier this week that for the next six months, Tesla could reap big gains in consumers’ and analysts’ confidence as more Model 3’s are delivered to more enthusiastic customers. “It’s an incredibly dynamic time,” Albertine said, “and when you think about it, with 400,000-plus standing orders for vehicles, manufacturers all across the country are wondering who’s in line for their vehicles.”
As always, Tesla may have other surprises in the coming months. Musk said that the company will reveal a prototype of its semi-truck in September, and suggested during last month’s annual shareholder meeting that could the company could announce additional disruptive news this fall.
Image credit: Tesla
Leon Kaye has written for 3p since 2010 and become executive editor in 2018. His previous work includes writing for the Guardian as well as other online and print publications. In addition, he's worked in sales executive roles within technology and financial research companies, as well as for a public relations firm, for which he consulted with one of the globe’s leading sustainability initiatives. Currently living in Central California, he’s traveled to 70-plus countries and has lived and worked in South Korea, the United Arab Emirates and Uruguay.
Leon’s an alum of Fresno State, the University of Maryland, Baltimore County and the University of Southern California's Marshall Business School. He enjoys traveling abroad as well as exploring California’s Central Coast and the Sierra Nevadas.