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Tesla Motors Inc Model 3 Release Is Most Important Q1 Reveal

Tesla Motors, Inc (NASDAQ:TSLA)

Tesla Motors Inc (NASDAQ: TSLA) shared better than expected earnings on Wednesday afternoon, but it was the company’s earnings call that really got investors excited. In the course of the call the company’s CEO Elon Musk spoke about the future of the company, and the release date of the company’s mass market electric car.

Mr. Musk said that Tesla Motors hopes to show off the Model 3 for the first time in March of 2016, less than twelve months away. That initial showing will be nothing but a demonstration of the design philosophy of the vehicle, however, the Palo Alto, California company is still very far away from an actual production run of the car.

Model 3 joins Tesla Motors crew

The planned reveal of the Model 3 means that Tesla will have three major car launching events in the next twelve months.

In the course of the earnings call Mr. Musk confirmed that the Model X would be ready to begin shipping in the third quarter of the year. Ryan Brinkman, who writes about Tesla Motors for JPMorgan, reckons that the firm will deliver just 50 Model X SUVs by the end of that period.

On top of that Tesla will turn its adept hands toward the Roadster 3.0, an update on the electric sports car that originally launched the Tesla Motors dream. That car is said be close to release right now, and may be available for order as soon as August.

The Model 3 really is the star of the show, however. The $35,000 electric sedan is what everything so far has been leading up to, and Mr. Musk’s promise of 500,000 deliveries and profitability by 2020 relies on its success. If production were to start toward the end of 2017, the second quarter of 2018 is likely when the first deliveries would arrive.

Tesla Motors goes mainstream

Musk says that late 2017 is the most likely time for production of the Tesla Motors Model 3 to begin production but, as with Mr. Brinkman’s report on the Model X, Tesla is known for its production issues and delays.

Morgan Stanley analyst Adam Jonas reckons that Tesla Motors will not meet its delivery targets for 2020 as the 500,000 number is highly dependent on meeting targets this year. Jonas says that Tesla will deliver just 51,000 cars in 2015. In the company’s earnings report Tesla reiterated an expectation of 55,000 car deliveries in 2015.

Tesla restated its hope to begin delivering Model X SUVs by the end of the third quarter, meaning that the company’s production issues may not be as constraining as previously thought. Analyst Rod Lache of Deutsche Bank said management’s tone concerning the Model X made him optimistic about the car’s production ramp up.

Analysts as a whole tend to agree on one thing when it comes to Tesla Motors. The company’s near $30 billion market capitalization isn’t based on short term results, and it won’t even be affected by them if the long term numbers seem correct.

Most of Wall Street seems to be betting that Tesla Motors can overcome short term financial problems and grow into a vibrant automotive technology company in the years ahead. Shares in the Palo Alto, California company traded flat in out-of-market trading as investors absorbed the company’s first quarter results.

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Adam Green is an experienced writer and fintech enthusiast. He he worked with LearnBonds.com since 2019 and covers a range of areas including: personal finance, savings, bonds and taxes.