Model 3 and Model X to Send Tesla’s (NASDAQ:TSLA) Stock Price a Lot Higher

Tesla-MotorsHere’s some good news for Tesla Motors Inc.’s (NASDAQ: TSLA) fans and investors: the company’s new affordable Model 3 will be unveiled in March 2016 and will also start taking orders at that time. Moreover, Tesla’s long-awaited Model X SUV will start delivery on September 29th of this year. The two new models could give a big boost to Tesla’s stock price.

Elon Musk, founder and CEO of Tesla, made the announcement through Twitter.

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Tesla Model 3: The Affordable Performance Electric Car

The Model 3 is going to give a big push to Tesla’s performance as it represents the company’s first move into the affordable car segment. So far, all Tesla’s offerings have been quite expensive, with the Model S starting at $70,000.

As Elon Musk tweeted, the Model 3 would start at around $35,000 before government incentives. After the federal tax credit, the car would cost $27,500, and you get all the running cost savings of owning an electric vehicle, too.

While the Model 3 is going to be cheaper than other models in Tesla’s lineup, the company is not going to compromise on its performance. The mass market car would accelerate from 0 to 60 mph in an impressive 4.1 seconds, and would have a range of 200 miles.

Tesla Model X: The World’s First Electric SUV

Also on Twitter, Elon Musk announced that the company’s first SUV—the Model X, would start delivery on September 29, 2015. As for the pricing, Musk said that the Model X would be $5,000 more compared to the equivalent trim of the Model S “due to greater size and body complexity.” Pricing for the top-of-the-line Signature Series of the Model X starts at as high as $132,000, because “Sig Series is fully loaded.”

Since they came to the marketplace, SUVs have always been known as gas guzzlers with not-so-good handling characteristics. Looks like the perception is about to change with Tesla’s new Model X.

The Model X will benefit from 259 horsepower from its front electric motors and 503 horsepower from the rear ones. The SUV would accelerate from 0 to 60mph in a supercar-like 3.8 seconds. Moreover, if you opt for the $10,000 Ludicrous Mode upgrade, the Model X would sprint from 0-60 mph in just 3.2 seconds!

Tesla Gigafactory: Ahead of Schedule

Some analysts have said that with new models coming out, Tesla would not be able to speed up its production process to meet the demand. For instance, production of the upcoming mass market Model 3 would rely on a “fully operational Gigafactory.”

Sure, the company isn’t exactly known for being ahead of schedule, but the Gigafactory’s building process seems to be going quite well.

In June, a Nevada economic development official said that Tesla’s Gigafactory was actually ahead of schedule. Most recently, Tesla secured a supply of lithium hydroxide, a key base material used to produce lithium-ion batteries used in its electric vehicles. The company has entered into long-term contracts with mining companies Bacanora Minerals Ltd and Rare Earth Minerals PLC. Note that Tesla’s Gigafactory in Nevada would have the capacity of making 35 gigawatt hours of battery cells. That would be more than all of today’s lithium-ion battery plants in the world combined.

Moreover, Pacific Crest Securities analyst Brad Erickson toured the Fremont factory where the Model X would be made, and found that Tesla’s Model X production line had three to four times more robots than the Model S production line. More robots could bring a more financially efficient production process as robots are cheaper than human labor. (Source: EV Obsession, last accessed September 4, 2015.)

The company is well underway to become a big player in an industry that is currently dominated by internal combustion engines. Tesla plans to produce 500,000 cars per year by the end of this decade. If the company successfully breaks into the mass market with its Model 3, expect Tesla’s stock price to shoot through the roof.