Tesla Predicted To Hit 350K-400K Model 3 Reservations By Wednesday

Tesla Motors Inc TSLA founder and CEO, Elon Musk, indicated via Twitter that Model 3 reservation activity had been very strong through the weekend, totaling 276,000 as of the night of April 3.

Pacific Crest’s Brad Erickson maintained a Sector Weight rating, with a fair value of $190.

Model 3 Reservations

Erickson expects management to disclose the final Model 3 reservation figures on April 6, with almost 200,000 orders having been placed as of April 1.

Musk indicated that the average selling price for Model 3 was about $42,000, which Erickson pointed out implied future revenues of $11.6 billion, given the stated total orders.

Related Link: Buy Tesla On Pullback? Global Equities Says We're At Tail End Of Any Production Issues

Given the average demand run rates, the analyst expects the company to disclose about 350,000–400,000 on April 6 for the first full week.

“This would be in line with our estimate of roughly 247,000 cumulative deliveries for 2018–2020 if you assume a two-thirds conversion ratio for reservations to actual orders,” Erickson stated.

What Lies Ahead?

The analyst expects Tesla Motors to increase capacity to the limit of 500,000 cars per year of the Fremont facility by 2020.

With the average selling price across all of the company’s cars in the range of $60,000–$65,000, Erickson believes that operating margins at 10-15 percent could prove optimistic.