Tesla Model 3 Ambitious Production And Price Not Viable Says Analyst

Tesla has previously announced that the production of the Model 3 is on track and that it has, in fact, plans to ramp up its efforts later on to meet the demands. The company also said long before that the price of each car is set at $35,000. One auto analyst, however, believes that the company will fail to deliver in terms of production and in keeping the promised price tag on the car.

Adam Jonas is an analyst for Morgan Stanley. He boldly predicted that Tesla will only be capable of manufacturing and delivering 2,000 Model 3 units this year which is a far cry from the 400,000 that the company once mentioned. With the small figure in sight, Jonas figured that Tesla will be having a soft launch sometime in Q4 of 2017. The reason for this, says Jonas, is that Tesla may want to finish the initial shipments first and gathering the data and feedback before increasing its production to about 80,000 units in 2018.

Jonas also told Bloomberg that the Tesla Model 3 will be available for an average of $60,000. The analyst explained that Tesla is indeed capable of making a Model 3 unit for $35,000 but he is doubtful that those who would order the car would want one to have less than spectacular features. He said that a Model 3 with the right quality and the features will be worth around $60,000. Jonas thinks that the price will skyrocket once the Model 3 gets "specced up".

Forbes reported that Tesla will begin production in July and gradually increase the workload to come up with at least 5,000 Model 3 cars each week. That figure is the target for the fourth quarter of this year. Come 2018, Tesla will be building around 10,000 Model 3s per week.

Whatever happens with the Model 3 will be a defining moment for Tesla. If Elon Musk's company fails to deliver on its promise to ship the Model 3 on time, the company may be looking at a sudden drop in its shares. The bear case scenario sees the company's shares falling to around $200 or even less. However, the bull case scenario has Tesla shares pegged from $300 to $400.

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