Monday, 18 April 2016

Will Tesla Model 3 Surface On Time?


Tesla Model 3 deliveries might suffer due to high pre-order influx.

As per the recent Model 3 update, surfaced by Tesla Motors Inc., the pre-orders are almost hitting 400,000 benchmark. In just a week’s time since its launch, the company succeeded in garnering 325,000 preorders which accumulate to $325 million in the form of deposits and around $14 billion as potential sales.
The aforementioned numbers suggest that Tesla Motors has succeeded in achieving all that it desired to do via its mass market electric car. Ironically, this is not it and the company is extremely far behind when it comes to attaining its target. Diarmuid O’Connell, the Vice President of Tesla’s Business Development segment boasted about the strong debut if Model 3 during the AVERE E- mobility Conference held in Amsterdam. As reported by Electrek, he seized the opportunity to mention that “the real success will be delivering a great product at the volumes.”
As per the executive, coming up with a huge volume of vehicles after a time span of two years is extremely important, attainable and necessary. But it needs to be noted here that Tesla has a bad habit of promising more than it can actually deliver. The company is in turmoil since it is striving to achieve stable production process for Model X- its luxury crossover SUV. For the same reason they also missed their delivery guidance for the first quarter. Lastly, they are also facing pressure to cater to the huge pre-orders of Model X putting their execution abilities on a test.
If one starts to translate the long term business strategy of Tesla Motors, the electric car giant is striving to reign over mass market via its cheaper cars. Along with that, they wish to exploit the high end market through Model X and Model S luxury cars. The company never wished to become the niche player the EV sector. So they are now coming up with cheaper cars so that they can penetrate amongst the masses. Elon Musk, the Chief Executive Officer at Tesla is thankful to the consumers of Model S and Model X since their investment has given them enough strength to come up with Model 3.
Model 3 is likely to be a game changer for them since it is not a conventional car but a long term sustainability plan for TSLA.
The number of pre-orders is quite high, so many analysts are of the view that the company succumb to the number of pre-orders. Certainly, the automotive giant needs to push its production capacity supply chain delivery mechanism throughout the globe and add new production plants to its portfolio. The company can come up with a production plant in China so that it can easily cater to Asians. Likewise, it can also establish one in Europe. Both these regions are a great start point since it is already coming up with charging stations there.
The company needs to deliver on schedule to gain the consumer trust. Deliveries have not been the forte of Tesla but they need to overcome their weakness.

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