The $35,000 Tesla Model 3 is finally here - Tech

Tesla shares are well below the equity conversion rate

The swath of initiatives Tesla Inc. Shares in Tesla closed 7.8 percent lower to $294.79 on Friday. "It is excruciatingly hard to make this vehicle for $35,000 and be financially sustainable".

Musk initially wrote that Tesla would produce 500,000 vehicles in 2019, a bold prediction given that the company only made 350,000 past year. However, customers with orders already in queue will get priority, which could delay some deliveries until June, Mr Musk said.

"To achieve these prices while remaining financially sustainable, Tesla is shifting sales worldwide to online only", Tesla said in a statement.

To be clear, there are many version of this auto.

But Musk has his company following much of the same playbook, and that's asking for similar results. You do still get a tinted glass roof with the standard model, however, along with four USB ports in the center console.

Musk, 47, didn't specify in his latest email to employees how many jobs will be impacted by the shift to online sales and said some workers will transition to other areas of the business. Big price cuts as unwanted inventory piles up. While we believe the introduction of the $35k Model 3 may be positive for overall program demand - which we and investors have been questioning given the phase out of the EV tax credit in the United States and price elasticity of demand for the higher priced vehicle variants - we also think this will drive a downward mix impact for Model 3 margins...

Tesla (TSLA) will begin selling a Model 3 sedan with a base price of $35,000, the company announced Thursday afternoon.

"Given its seeming abruptness, it does not appear that yesterday's announcement was made from a position of strength".

For the Model S, the cheapest auto is now the Standard Range with 270 miles on a full charge.

Rates market-perform, price target US$325. Tesla had the nerve to claim it was hitting that price "earlier than we expected", even though the 400,000-plus people who got on the reservation list were led to believe they'd have one in their garage before Tesla's federal tax credits were cut in half January 1. "If orders jump by 100,000 units (which we believe is possible), that alone can pull in US$250 million of cash onto the balance sheet". During the call, CEO Elon Musk revealed that the company would not be profitable in its first quarter and noted that all global sales were transitioning to an online-only ordering system.

"As always, bulls/bears will both be in an anguished frenzy about the implications of last night's announcement/press call".

"The margin on the vehicle obviously is going to be very small if there's any margin there at all", said David Kudla, CEO of Mainstay Capital Management, which has a short position in Tesla. Tesla says by doing this it will be able to lower prices across its lineup by 6 percent on average.

Less likely to be pleased is the group of new Tesla buyers who have just seen pricing for Model 3, Model S, and Model X cars drop considerably.

Rates equalweight, price target US$350.

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