Tesla Model 3 On Track For July Regardless Of Yet Another Financial Loss
Updated June 1, 2017
Building a car company from scratch is a tough business. Yet, Tesla made it possible with a cool business model, fantastic cars and astonishing performance they bring. Yet, Elon and others involved will have a bloody nose for many months and years before posting and important financial gains.
At their latest letter to shareholders, Tesla reported their plans for the future but also reported a $121 million loss for the fourth quarter of 2016. Sure, this does not seem to be a good sign, but the fact is that this loss is actually two-thirds smaller compared to the loss recorded for the fourth quarter of 2015.
Apart from reporting the loss, Elon Musk notified the shareholders about the progress they have made with the Model 3. The most important car in Tesla history seems to be right on schedule. The production of the Model 3 will start in July. Sure, the first couple of days they’ll be producing pre-production prototypes. The production will ramp up till the end of July to more than 5000 units per week. This is definitely a huge deal as Tesla plans to increase the production of the Model 3 to 10,000 units a week in 2018. Apparently, the production will be much simpler compared to the Model S and the Model X. High-end cars have much more luxury stuff in after all. For example, Elon noted, the Model 3 has only one screen compared to two in the S and the X.
Ben Kallo, an analyst at Robert W. Baird & Co commented on this: “It is all about the Model 3, and Tesla says the suppliers are on time, which historically has been a thorn in Tesla’s side.”
The Tesla plans to sell the Model 3 for $35,000 a pop. Depending on the government initiatives, some will be able to further cut the price of it even below $30,000. After all, Tesla has more than 300,000 orders for the car.
Another piece of news also suggests Tesla will be building two more plants in Nevada. They plan to dramatically increase production capacity, lowering costs and improving the quality of the vehicles. Scheduled to reach the market with autonomous tech on board, Model 3 could be a spark to change the layout of the whole car market. Not only in the US, but in the world as well. We have exciting times ahead of us.