Tesla Model 3 is Fully Charged……we think
After what seems to be an interminable wait, the much anticipated Tesla Model 3 is now fully charged and supposedly with us, we think.
Announcements made by the company would indicate that the car is now in production and the first deliveries will be made on July 28th; however, in the same announcement, Tesla has acknowledged the rumour that had been circulating about the shortfall it is facing in manufacturing the 100 kilowatt battery packs.
The 100 kilowatt battery pack is perhaps the cornerstone of Tesla’s future success. It is made with some new technologies and on production lines. The battery was what Elon Musk was counting on to power the company’s cars into the future. As a result of this, overall car production for Tesla remained at about 25,000 cars for the second quarter of the year, instead of the 40,000 or so that they had hoped for. The news sent Tesla share price tumbling, but Musk seemed undaunted and was bullish enough to announce that the company will be producing 20,000 units of the Model 3 per month by December. The Model 3 is seen as critical for the success of Tesla. Until now the company has been producing small numbers of vehicles that they sell at a relatively high price of USD90,000 or more. In 2016, the company managed to manufacture and sell a mere 85,000 vehicles, which really is not many.
Priced at USD35,000, the Model 3 then is the car that Musk wants to reach a much wider range of customers and push the company’s output of cars to more than half a million by 2018. Currently, the car is being made in Tesla’s plant in Fremont, California, but according to a Tweet from Musk, this plant is already “bursting at the seams”. Which may be why the company has been in talks with Chinese officials about opening up a production line near Shanghai; after all 15%, of Tesla’s revenue already comes from China. Oh, and of course Chinese internet giant Tencent Holdings also owns 5% stake in the company.
The Model 3 has been a long time in the making and Tesla has already invested massively in a USD5 billion factory in Nevada to make batteries for its future car business. However, the company is still in need of extra funds as to date the company still loses money; the first quarter of this year saw losses of USD397 million alone.
READ ALSO: Nevada Wins Bid For Tesla’s Gigafactory
Not that any of this bad news seems to be having a long term negative impact on the company share price. Thus far this year, share value has risen 65% and the company has a market cap of USD58 billion, which beats GM by USD4 billion and Ford by USD12 billion, and both of these companies make millions of cars per year.
Images: fullychargedshow channel on Youtube; Motor Trend