Tesla Model 3
Tesla Motors Unveils Model 3 To Almost Hysterical Acclaim.
Huge Number Of Orders Generated
“Model 3 has been designed for the iPhone generation consumer and the competition is completely clueless”
“For perspective, our 2020 forecast for total completed delivery is just under 249,000 or less than half of Tesla’s own targets”
HAWTHORNE, Calif., Tesla Motors unveiled its long-awaited electric car for the mass market, the Model 3, accompanied by the now standard whooping and hollering from the home crowd, and followed by some over-excited reaction from some investors.
Would be buyers were losing control too as more than 100,000 pledged $1,000 deposits (returnable, in fact) before the Model 3 was even revealed. During his presentation, CEO Elon Musk said orders had reached 140,000. This for a car that at best will reach sales of only 12,200 next year, according to Cairn Energy Research Advisors (Cairn ERA) of Boulder, Colorado.
Typical of the over-the-top reaction of some investors included this from Global Equities Research (GER) of Palo Alto, California.
“Model 3 redefines the auto industry. The auto industry has been stuck making Tiffin Boxes for decades and their time is fast coming to an end. There is no way BMW, Porsches, GM, Toyota, Honda or any other existing auto manufacturer can even come close to competing with Tesla Model 3,” GER said.
“Model 3 has been designed for the iPhone generation consumer, whose lives are digitally super-centred, and the competition is completely clueless,” it said.
That remains to be seen.
Blown away
Usually restrained Evercore ISI was blown away too though.
“The Tesla Model 3 reveal exceeded all expectations. To us the vehicle is “The Game Changer” and will likely play a critical role in Elon Musk’s desire to expedite the auto industry’s transition from internal combustion engine to electric; a path which no other (manufacturer) to date looks committed to,” said Evercore ISI analyst George Galliers.
A slightly more cautious view came from Morgan Stanley’s Adam Jonas, who said if Tesla can produce and deliver, even roughly on time, the car they unveiled last night at close to a $35,000 price, then its stock is probably quite undervalued.
Tesla has been plagued by failing to meet delivery promises, and during his presentation Musk said with a grin and friendly laugher from the audience – “I do feel fairly confident it will be next year. As for price, it’ll be $35,000. And I want to emphasize that even if you buy it at $35,000 – no options at all – this will still be an amazing car.”
Jonas said the orders were probably the fastest growing ever on the first day.
“How many days will it take for the order book to cross 200,000? 300,000? For perspective, our 2020 forecast for the company’s total completed delivery total – Model S, X and 3 – is just under 249,000 or less than half of Tesla’s own targets,” Jonas said.
100,000 short
Cairn ERA said Tesla will have shipped 196,890 Model 3s by 2020, about 100,000 short of Tesla’s official guidance.
CEO Musk revealed the starting price of the Model 3 before tax and government incentives, but gave little away in the way of detail, not surprising really because the car doesn’t go into production until late next year.
The car was billed as being a competitor for the battery-electric Chevrolet Bolt, Nissan Leaf and Hyundai Ioniq. Not so, said IHS Automotive analyst Stephanie Brinley, because of its size, range and performance.
“Model 3’s natural competitive set may be more accurately the BMW 3-Series, Audi A4, Mercedes-Benz C-Class, Lincoln MKZ and Cadillac CTS,” Brinley said.
According to Cairn ERA, when the Model 3 eventually comes to the market the performance, at least of the most powerful versions, will surpass the hottest versions of sedans like the BMW M3 and Mercedes C-class AMG. Eventually there will be a coupe, a cabriolet, a small SUV and maybe a pickup truck. A 65 KwH Model 3 will scorch from rest to 60 mph in 4.4 seconds, will have range of 225 miles and take one hour for a fast recharge.
BYD 36 wins
Cairn ERA said next year the biggest selling electric car globally is going to be the Chinese BYD e6. Cairn reckons the e6 will notch up 86,500 sales in 2017. Close behind is the Nissan Leaf at a projected 80,745. Other big sellers will include the Hyundai iOniq (37,077) and the BMW i3 (31,730). Cairn sees only 12,200 Model 3 sales in 2017, but production will have barely got underway by the end of the year.
Morgan Stanley’s Jonas liked Tesla’s plan to accelerate the supercharger and dealer network.
“Not so much for their expectations of sales volumes, but for what we believe may be the ultimate incarnation of the company’s ‘master plan’; a shared autonomous electric transport network where revenue is generated through the sales of miles rather than units. Doubling the number of stories and superchargers in the next 12 months starts to imply some very serious physical numbers of real estate and service assets in the field to support the captive ecosystem of a transportation megafleet,” Jonas said.
“We have said for some time that, despite its many worthy accomplishments, Tesla had not yet truly disrupted the auto industry. We are now getting a feeling that this may be starting to change,” Jonas said.
Restraint
There were some voices of restraint to be found though.
The Wall Street Journal’s Heard on the Street column reported on the Model 3 in a piece headed “Tesla Model 3: Is This Stock Already in Ludicrous Mode”. This referred to CEO Musk’s reference to the capability of the Model S if you pressed the right buttons to attain blinding performance, which he called “ludicrous mode”. In a radio podcast Heard on the Street referred to signs of good demand for the Model 3, but described Tesla’s ability to be able scale up production “a huge question”.
“Tesla has never set a production deadline it didn’t miss,” said one anonymous commentator.
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