Tesla Inc’s (NASDAQ:TSLA) Low-priced Model 3 is Ready
Earlier this week, Tesla Inc (NASDAQ:TSLA) announced that its low-priced Model 3 car had passed all regulatory requirements, hence, it would begin production by end of week.
The Model 3 is Tesla’s first car targeting the mass market given that it is priced at $35,000. The Model 3 is an ambitious project for Tesla since the company currently manufactures very expensive niche cars such as the Model X, which only the wealthy can afford. However, this is set to change, as the Model 3 will be mass-produced at a price that is affordable for most car-owners.
Tesla’s CEO, Elon Musk, announced that the first thirty owners of the Model 3 would receive their cars at a handover ceremony on July 28. The company has a target of producing at least 500,000 cars by 2018, which would be a major achievement according to Tesla’s current production capability.
Elon Musk stated that after the production of the first 30 Model 3 cars, the company intends to produce 100 cars in August and about 1,500 cars in September. By the end of the year, Tesla is set to be producing at least 20,000 cars per month.
The company faced significant production challenges with its Model X SUV, which has cast doubt on the company’s ability to sustain its ambitious production schedule.
The Model 3 has several customizable options such as wheel size, car color and engine type, which might increase the cars’ cost, hence, affecting its positioning as a low-cost electric car.
Tesla’s stock price has risen by 64 percent this year, which can be attributed to positive investor sentiment towards the company in anticipation of the Model 3’s successful release and production.
Tesla’s market valuation has also risen to almost $60 billion, which is higher than the valuations of both General Motors Company (NYSE:GM) at $54 billion, and Ford Motor Company (NYSE:F) at $46 billion.
The Model 3 is a vehicle whose production is aimed at achieving Tesla’s ambitious goal of ensuring widespread adoption of electric cars across the United States and globally.
It remains to be seen whether the Model 3 shall meet the high expectations pinned on it to drive future sales growth and generate positive returns for the company’s investors over the long-term.
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