Tesla Motors Inc (NASDAQ:TSLA) just used corporate doublespeak to throw in some confusion about when you’ll be able to drive its Model 3. Yesterday, news broke in the market that Tesla might have delayed the rollout of the Model 3 once again. A company presentation that was delivered last week at the EIA Conference in Washington, DC says Tesla has a “$35,000 200-mile electric car planned for 2018”.
Before now, Tesla had told investors that it hopes to show off the Model 3 for the first time in March of 2016. The firm also notes that the most likely time for the production of the Model 3 is in late 2017. Now, Tesla’s CTO, JB Straubel is saying that the car won’t hit the roads until 2018.
Tesla has supposedly come out to provide a semblance of clarity on the matter in a response to Bloomberg’s Cory Johnson. The firm says the concept design of the Model 3 will be showcased in Q1 2016. The deliveries of the Model 3 will begin in 2017. Full production of the Model 3 will be in 2018.
The Tesla Model 3 – What we know so far
The Model 3 is supposed to be Tesla’s key for entering the mass automobile market with a less expensive electric vehicle. The Model 3 is coming to the market with a price tag of $35,000 compared to $70,000 for the Model X and $100,000 for the Model S.
At $35,000 the Model 3 isn’t cheap but it will sit at bottom of the Tesla lineup. The Model 3 EV will be an aerodynamic four-door sedan about 20% smaller than the Model S. Early on, Tesla said it would avoid costly delays by not going “super crazy” with the design. The market also understands that Tesla has a history of missing dates when it comes to delivery schedules of its cars. Tesla unveiled its Model X in 2012 and the car is yet to hit the roads after three years.
Here’s What the Market Thinks
The sudden exit of CFO Deepak Ahuja after the obtaining a $0.75B loan raised some concerns about what top management thinks about where the company is headed. Now, the delay in the production of the Model 3 adds another twist to the plot.
You’ll remember that Veronica Wu, a top Tesla executive in China resigned just before production delays were announced in China. Wu’s resignation happened just after Tesla’s China Chief of Communications Peggy Yang left the firm. This is not to say that Ahuja left the company because of production delays in the Model 3. However, history tends to repeat itself and when it doesn’t – it tends to rhyme.
The shares of Tesla were trashed in yesterday’s session as the stock dropped 2.6% to an intraday low of $255.69. The stock finally closed down with a loss of 1.04% at $259.79 to mark the widest intraday decline since June 10. The shares of Tesla have had an impressive run so far. The stock has already gained 18% in the year-to-date period. However, recent events might cause the investors to rethink their position on the stock.