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Every night from 10pm The news arrives for Fox 5 New York, asks for a voice. Do you know where your children are? I raise this question because it's the same question, asked every night, and it's been this way for years. In a similar situation, Tesla customers (TSLA) have been asking the same question for over three years. With another quarter in the books, a missing estimate in shipments of all models, the $ 35,000 basic model 3 remains non-existent.
Let's go back to March 2016, when Elon Musk came on the scene when Tesla unveiled its long-awaited "mainstream" sedan. The background showed a starting price of $ 35,000 before the incentives. This prompted so many consumers to mop up deposits that we had updates from Elon Musk and Tesla almost every hour. The company's shares have skyrocketed and the bulls have talked about the future to come.
With hundreds of thousands of deposits in reserve, Tesla has accelerated its production schedule, resulting in an increase in the number of skeptics. Despite multiple capital increases since then, the company has not been able to meet its production targets and even last week management confirmed that it still had not produced 5,000 units a week for a quarter.
When Model 3 was delivered to US consumers, it was expected that the standard battery version, starting at $ 35,000, would be marketed in November 2017. At that time, Tesla customers had access to all electric vehicles. at USD 7,500. tax credit, which has since been cut in half. After a number of rollbacks since then, the base model 3 was added to the order page on February 28th of this year, as shown in the image below.
(Source: Tesla Model 3 page initially after the $ 35k version added to the order page, estimate now indicates 6-8 weeks)
If you notice the timeline at the bottom of the screen, it is estimated that delivery will be within two to four weeks. To try to get the maximum lead time, the location was set on the east coast of the United States because delivery to markets in this country would obviously take a little longer than the state of California, where Tesla resides, for example. Well, last Thursday was five weeks from that date, and this may not be a surprise to anyone, but the $ 35,000 version still does not exist. In reality, ELECTrek contacted Tesla and got the following answers:
Asked about the production status of the new version of Model 3, Tesla declined to comment.
In addition, Tesla does not seem to know the weight of model 3 with standard battery.
In addition, ELECTrek said that he made contact with two people in Tesla, one of whom never returned to them and the other was the person "refused to comment" mentioned above. It is interesting to note that in addition to not knowing the weight of the vehicle, the order page of model 3 has been changed from the above image, the 220 km page being now a "estimate" rather than apparently confirmed, as indicated below. This seems to reinforce the argument that the car simply does not exist.
(Source: Model 3 page above)
Currently, the estimate is 6-8 weeks, which puts us in mid-May. But what if it slips even further? Remember that on July 1, consumers would lose another portion of the electric vehicle tax credit. Instead of these $ 7,500, they would be reduced to $ 1,875. Unfortunately, the situation is even worse than that described in the table below. The interest rate shown on the Tesla pages for its base-level vehicles has more than doubled since the initial November 2017 calendar for model 3 to $ 35,000.
(Source: Tesla Model S page, seen here – model 3 has the same rate
So let's look at some numbers. Consumers who initially thought they could get a $ 27,500 model 3 after the federal credit now stand at $ 31,250, which could even disappear in a few months. In addition, rising interest rates would mean an additional interest of nearly $ 3,400 for a five-year loan. This basically means that consumers have lost all the credit when they examined the cost of ownership of this vehicle. This does not even take into account other expenses, such as rising fuel costs since the end of 2017.
In the end, another disappointing quarter is expected for Tesla, and customers are still waiting for Model 3 of $ 35,000 to appear. As I mentioned in my article on first quarter deliveries, management said that US orders far exceeded what they could deliver, but how many of those orders involved a car that does not have a car? does not exist? Since it takes $ 2,500 to order, Tesla probably used the basic version as another mini-capital increase, and consumers continue to lose.
Disclosure: I / we have / we have no position in the actions mentioned, and we do not intend to initiate a position within the next 72 hours. I have written this article myself and it expresses my own opinions. I do not receive compensation for this (other than Seeking Alpha). I do not have any business relationship with a company whose actions are mentioned in this article.
Additional disclosure: Additional Information from the Author: Investors are always reminded that before making an investment, you must exercise your own due diligence for any name directly or indirectly mentioned in this article. Investors should also consider seeking the advice of a broker or financial advisor before making any investment decisions. Any element of this article should be considered as general information and not as a formal investment recommendation.
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