Date
26 May 2017
A wheel of a prototype of the Tesla Model 3 is shown on display at a factory in Nevada. Tesla says the Model 3 will be ready for volume production by September. Photo: Reuters
A wheel of a prototype of the Tesla Model 3 is shown on display at a factory in Nevada. Tesla says the Model 3 will be ready for volume production by September. Photo: Reuters

Tesla Model 3 on course for volume production by September

Tesla Inc. says its mass-market Model 3 sedan is on track for volume production by September, relieving investors who see the electric vehicle as the avenue to profitability for the young company.

But the carmaker’s operations continued to burn through money, and it plans an additional US$2 billion to US$2.5 billion in capital expenses before the Model 3 launch, a pace that analysts said could drive chief executive Elon Musk back to Wall Street soon for a fresh infusion of cash, Reuters reports.

Tesla, whose shares rose 2.9 percent to US$281.64 after the bell, beat analysts’ expectations for revenue, while its adjusted loss missed the consensus target. Up to Wednesday’s close, Tesla’s stock had risen 53.9 percent in the past 12 months.

Many investors and suppliers have predicted Model 3 volume production would be delayed until 2018, but Tesla said it would produce over 5,000 Model 3s per week “at some point in the fourth quarter”, and 10,000 vehicles per week “at some point in 2018″.

Ivan Feinseth, director of research at Tigress Financial Partners, said Tesla “delivered the results the market has been expecting” that drove the stock from a year low of US$167.84 last February to a year high of US$287.39 last week.

By late spring or early summer, Feinseth estimated, Tesla will likely raise more money, noting that today’s highs could make it sooner rather than later.

“You have to feed the ducks while they’re quacking. If they came to the market now they would be well received,” he said.

Tesla did not give its usual full-year delivery estimate but said it expected to deliver 47,000 to 50,000 Model S and Model X vehicles combined in the first half of 2017. It did not give a Model 3 target.

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