Tesla Model 3: 5 Things You Need to Know

5 Key Questions About the Tesla Model 35 Key Questions About the Tesla Model 3

Tesla Motors Inc (NASDAQ:TSLA) is hosting an event on March 31 that could dramatically alter both the company’s image and its share price. I’m sending out an alert to all Profit Confidential readers that TSLA stock is poised for major, never-seen-before gains in the aftermath of this announcement: the company is finally giving us a glimpse of the long-awaited “Model 3.”

It’s supposed to be the company’s affordable electric car, an X factor that will take the stock to the next level. After all, there are only so many people who can shell out the (upwards of) $75,000 needed to purchase a “Model S.” Tesla needs an affordable option in its lineup if the company is to make the leap from niche to mainstream.

Tesla CEO Elon Musk has been dropping hints about the car for some time, but he’s kept a tight lid on this particular announcement. However, we’ve been able to piece together some tidbits of information to figure out how it could impact TSLA stock.

The following are five key questions and answers about the upcoming Tesla Model 3:

When Can I Buy a Tesla Model 3?

Judging by past statements, I don’t expect to see Model 3s on the road until late 2017. Tesla started shipping the “Model X” in October last year, so there could be a similarly timed rollout for the Model 3. However, pre-orders will be available far before the model hits the road. Tesla will start accepting $1,000 deposits on its latest addition on the night of the unveiling. (Source: “Tesla’s big Model 3 reveal may feature a drivable version of the car,” Business Insider, March 17, 2016.)

How Much Will a Model 3 Cost?

Tesla is expected to price the car at $35,000, although it would be even cheaper after tax incentives are included. The cost is far below the Model S or Model X, but I wouldn’t call it inexpensive. Of course the barrier to ownership would come down once those vehicles enter the used car market, so it’s not that big a deal. (Source: Ibid.)

What Does the Model 3 Look Like?

Like I said, Elon Musk has kept a tight lid on the Model 3 release. There haven’t been any leaked pictures of the design or anything quite like that. All we have to go on is a teaser photo from Tesla that shows the car’s silhouette.

tesla motors model 3

Source: Tesla Motors Inc

How Many Model 3s Does Tesla Plan to Make?

Tesla’s production forecasts suggest the company is aiming for 500,000 cars a year by 2020. To be honest, I used to think 500,000 was a moonshot goal that would be incrementally reduced, but I was flat out wrong. Several analysts were recently touring Tesla’s factory in Freemont, California and their reactions completely changed my mind. (Source: “Wall Street Tours the Tesla Factory—and Loves What It Sees,” Bloomberg, March 14, 2016.)

All of them report a staggering level of expansion. Tesla has replaced key pieces of equipment in order to prepare for mass production. These guys aren’t joking around—Elon Musk was dead serious about becoming a mainstream automaker.

What Does the Model 3 Mean for TSLA Stock?

Finally, we get to the thing that really matters. How will a mass market electric car affect Tesla stock? From my vantage point, it’s a no-brainer. I think the Model 3 is Tesla’s X factor. It will lift Tesla to previously unimagined heights, putting it in the same league (market cap-wise) as giants like Toyota Motor Corporation. The stock is up 35.9% in anticipation of the announcement.