The Tesla Model 3 is the car that could make or break Tesla . Recent news about the Model 3 suggests that the car could fail even before it gets a chance to fly. The Model 3 is the mass-market EV that is meant to transform the firm into a mainstream automaker to help divest its branding as a maker of ‘luxury’ cars. When Elon Musk unveiled the Model 3 last year, he didn’t have to struggle with a marketing pitch because the car looked good enough to sell itself.
Musk revealed that that the base Model 3 is impressive even without options. Of course, the known features of the Model 3 probably make it the best car you can buy for $35,000 and you could get an exponentially upgraded car if you buy some of the options. Incredibly, about 375,000 people had dropped $1000 deposits for the Model 3 even before the production of the car started. Musk promised that the first deliveries of the Tesla Model 3 will begin in Q4 this year but recent revelations suggest that the Model 3 might be behind schedule.
The Tesla Model 3 beta prototype isn’t ready
Insight from Tesla ‘s 10-K filing with the U.S. Securities and Exchange Commission (SEC) on March 1 suggests that the firm might be seriously behind schedule in the development of the Model 3.
In the 10-K filling, the firm noted that “we expect that the next performance milestone to be achieved will be the successful completion of the Model 3 Beta Prototype, which would be achieved upon the determination by our Board of Directors that an eligible prototype has been completed. Candidates for such prototype are among the vehicles that we are currently building as part of our ongoing testing of our Model 3 vehicle design and manufacturing processes.”
The above statement from the firm suggests that Tesla is yet to “complete” a “beta prototype” for the Model 3 as at March 1 when it filed the 10-K was filed. Of course, Musk plans to start producing the Model 3 in second half of the year but the fact that he doesn’t even have a beta prototype yet suggests that the Tesla Model 3 is still far off from production.
Tesla’s Model 3 updates are confusing at best and potential buyers can only fold their hands and hope for the best. If Tesla says it doesn’t yet have the beta prototype of the Model 3, we can assume that it has an ‘Alpha’ prototype. Yet, the firm had two drivable cars on stage during the unveiling of the Model 3 last year. Hence, it is difficult to know exactly what Tesla means by beta prototypes since it already debuted 2 drivable cars about one year ago.
Analyst thinks Tesla will miss Model 3 deadline
Concerns about Tesla Motors ability to meet delivery deadlines for the Model 3 are already triggering bearish sentiments about the stock on Wall Street. David Tamberrino, an analyst at Goldman Sachs is now in the bearish camp on Tesla’s stock. The analyst in a research note downgraded the stock from a ‘Neutral’ rating to a ‘Sell’ rating. He also reduced his six-month price target on the stock from $190 to $185.
Goldman Sachs expressed worry about Tesla’s ability to meet Model 3 delivery deadlines. The analysts observed that “Tesla currently has a lead relative to OEM peers… our concerns are more near-term oriented with respect to operational execution on the Model 3 launch, and cash needs.” The analysts also noted that “ultimately we see a delayed launch” for the Model 3 because “operational execution is still unproven.”