Tesla's Model 3 Is Off And Running; Will Lack Of Money Short Circuit Its Sales?

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Maye Musk and Tesla CEO Elon Musk attend the 2017 Vanity Fair Oscar Party on February 26, 2017. (Photo by Pascal Le Segretain/Getty Images)

Now that the Model 3 is on the road, investors want to hear more about Tesla's plans. How soon will it be in mass production? What else does Tesla have on the drawing board?

Jamie Albertine, senior auto analyst for Consumer Edge Research, said in an interview that such questions are bound to rise. "As with any company that's embarking on a major turning point, investors tend to shift on forward leading indicators."

On Tesla's August 3 Q2 earnings call, CEO Elon Musk talked about the importance of the Model 3 to the company's future. "So first of all, I want to say that Friday night was an amazing time for Tesla. It was one of the most important days in the history of the company. It's something we've been striving for, for 14 years."

Tesla's Model 3, its first mass market EV, starts around $35,000 and has a long list of people waiting to buy one. Albertine is confident that Tesla can stay on track. "Tesla's core product demand remains high. And its margin performance on a gross margin basis has continued to surprise by being in line with management guidance."

Consumer Edge has an overweight (buy) rating on Tesla, and gives its stock a $385 fair market value. Tesla closed on Thursday at $355.90, up 0.8% for the day.

Goldman Sachs consumer goods analyst David Tamberrino doesn't have the same level of confidence in Tesla. In fact he has a sell rating and a $200 price target, far below Tesla's closing price.

One thing he and Albertine agree on is that investors are focused on the future, on products coming down the pike. But Tamberrino thinks it's questionable whether Tesla will generate enough cash to keep all of the balls it's juggling in the air. "As Tesla is likely to continue to move forward with its new products," such as its upcoming Model Y compact SUV, a semi-truck, Solar Roof, autonomous vehicle development etc., "the incremental R&D spend and capex for capacity could continue to weigh," on financial results, he said in a report released last Monday.

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Maye Musk and Tesla CEO Elon Musk attend the 2017 Vanity Fair Oscar Party on February 26, 2017. (Photo by Pascal Le Segretain/Getty Images)

Now that the Model 3 is on the road, investors want to hear more about Tesla's plans. How soon will it be in mass production? What else does Tesla have on the drawing board?

Jamie Albertine, senior auto analyst for Consumer Edge Research, said in an interview that such questions are bound to rise. "As with any company that's embarking on a major turning point, investors tend to shift on forward leading indicators."

On Tesla's August 3 Q2 earnings call, CEO Elon Musk talked about the importance of the Model 3 to the company's future. "So first of all, I want to say that Friday night was an amazing time for Tesla. It was one of the most important days in the history of the company. It's something we've been striving for, for 14 years."

Tesla's Model 3, its first mass market EV, starts around $35,000 and has a long list of people waiting to buy one. Albertine is confident that Tesla can stay on track. "Tesla's core product demand remains high. And its margin performance on a gross margin basis has continued to surprise by being in line with management guidance."

Consumer Edge has an overweight (buy) rating on Tesla, and gives its stock a $385 fair market value. Tesla closed on Thursday at $355.90, up 0.8% for the day.

Goldman Sachs consumer goods analyst David Tamberrino doesn't have the same level of confidence in Tesla. In fact he has a sell rating and a $200 price target, far below Tesla's closing price.

One thing he and Albertine agree on is that investors are focused on the future, on products coming down the pike. But Tamberrino thinks it's questionable whether Tesla will generate enough cash to keep all of the balls it's juggling in the air. "As Tesla is likely to continue to move forward with its new products," such as its upcoming Model Y compact SUV, a semi-truck, Solar Roof, autonomous vehicle development etc., "the incremental R&D spend and capex for capacity could continue to weigh," on financial results, he said in a report released last Monday.

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Read Again https://www.forbes.com/sites/jamesdetar/2017/08/31/teslas-model-3-is-off-and-running-will-lack-of-money-short-circuit-its-sales/

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