The Tesla Model 3 Launch: Elon Musk's Moment Of Truth?
In terms of big events, it doesn’t get much bigger than the March 31 launch of the Model 3 for Tesla Motors Inc (NASDAQ: TSLA) shareholders. Up to this point, Tesla has been a success in the luxury market for wealthy buyers who are conscious about their carbon footprints. However, as Quartz’s Steve LeVine writes, Elon Musk always had a much bigger goal in mind.
“Back in2004, when he became Tesla’s primary investor and chairman, his objective wasn’t to build cool cars. It was to trigger the birth of a new, mainstream industry—to bring electric cars to the masses.”
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In that sense, the Model 3 could be the culmination of Musk’s vision.
Despite a stock price that has soared 901.9 percent in the past five years, Tesla sold about 51,000 automobiles in 2015. LeVone points out that that even if Tesla hits its sales projections (at their peak, 93,000 vehicles) in 2016, it will still only represent about 4.0 percent of the combined sales of luxury brands BMW and Mercedes. And those numbers pale in comparison to the 17.5 million unit total U.S. auto sales last year, fueled by mass market leaders General Motors Company (NYSE: GM) and Ford Motor Company (NYSE: F).
Musk and Tesla investors are hoping that the new $35,000 Model 3, which reportedly will be able to travel 200 miles on a single charge, will finally be Tesla’s answer to its widespread appeal problem. As LeVign sarcastically quips, no pressure.
Disclosure: the author holds no position in the stocks mentioned.
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