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2016-12-09 19:13:38 Model 3 - 400.000 reservations

"2017 is the year of the Model 3.

What’s the content? Where are the prototypes? When do we get to drive it? Will we want one? Is it as good (or better) than the Model S for less than 1⁄2 the price? When does it launch? "

“We do not expect the Model 3 to be launched in 2017. While we cannot rule it out, we do not adopt as our base case a scenario in which Model 3 deliveries begin in 2017. We recognize that Tesla management has targeted a 2H launch date and that they will make every effort to satisfy high levels of preliminary demand and fill orders for the product as soon as possible. However, our base case is for a launch in late 2018. We have taken this conservative approach to allow for the probability that Tesla will choose to prioritize the quality, cost, performance and lifesaving technology of the vehicle. While Tesla still adopts a high level of vertical integration, we expect the Model 3 to rely even more extensively on 3rd party suppliers than the Model S, potentially increasing the scope of supply-related factors outside of the company’s control.”

“Safety and sheer human driving pleasure are the two key attributes (in that order) that we expect Tesla to showcase with the Model 3, regardless of when it is launched. Elon Musk stated on the 3Q call that it did not need to raise capital (but he did not categorically rule it out). We have not modeled in a capital raise, but gross cash in our earnings model does dip below $1bn by the end of 2018. We only point out that the Model 3 is so important to this company’s future on multiple levels that they really have to get it right. One could reasonably expect Tesla to emphasize to the investment community the opportunity it has to accelerate the launch of what could be the world’s safest automobile and one that represents a potential step-change in real-world machine learning (and the subsequent social and economic benefits). We see ‘teasing’ the Model 3 launch as going hand and hand with efficiently funding the strategy. These two 2017 drivers appear to be inextricably linked.”

Adam Jonas, electrek




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