TSLA Stock Rallies on 2016 Tesla Model 3 Unveil, Production

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Tesla (TSLA) stock got off to a roaring start on Wednesday, jumping more than 10% after Tuesday afternoon’s earnings report. Driving the rally were solid third-quarter production numbers, an upbeat Elon Musk, and confirmation that the Tesla Model 3 will be unveiled in March 2016.

tesla earnings tsla stockAnyone who owns TSLA stock was relieved by the news, especially in light of the last three months, which have seen shares take a 13% hit.

TSLA’s valuation is heavily tied to its ambitious future plans, so it’s no surprise that any developments regarding the Tesla Model 3 can move the market.

After all, it will be the company’s first mass-market, semi-affordable vehicle, and the company’s unofficial inauguration into the big leagues.

Tesla Model 3: March 2016 Unveil

The Tesla Model 3 will be a $35,000 electrically powered sedan, and it’s the main reason behind Tesla’s construction of the gigafactory, set to be the largest battery-production facility in the world upon its completion.

Musk said in a letter to shareholders that TSLA is “on track to unveil Model 3 in late March 2016.” Note that this doesn’t mean the car will be available or even in production at that time — merely that there will be a prototype of the car cleared for the public’s eyes.

The Tesla Model 3 still isn’t expected to be commercially available until sometime in 2017, though you should be able to pre-order them in 2016. TSLA will rely on sales of its Model S and Model X vehicles until then.

If you’re wondering why simply confirming that the Model 3 will be unveiled — not released — in 2016 is such a big deal, consider that the company has dealt with a laundry list of delays in the recent past.

Notably, TSLA whiffed on the debut of its Model X SUV, which launched a few months ago, in September … two years after its original deadline. Even then, it faced production delays, and the company had to lower its 2015 deliveries forecast multiple times. What began at 55,000 turned into the current 50,000 to 52,000 vehicle range.

So it’s reassuring to TSLA stock holders that they’ll get a glimpse of the Tesla Model 3 within the next five months. That lends a bit more credence to the hope that it will hit the streets by 2017, despite rumors that internal documents say the sedan won’t come until 2018.

It’s also reassuring that TSLA still plans on leading the revolution of self-driving vehicles, alongside Alphabet (GOOG, GOOGL) and perhaps even Apple (AAPL). The Model 3 certainly won’t be fully automated, but Musk sees fully automated vehicles being the norm within the next 15 to 20 years.

Musk finished the letter to shareholders on a traditionally ambitious note:

“Our customers drove their cars almost 250 million miles this quarter, for a total of nearly 1.5 billion miles to date. We are looking forward to the day when we can tell you how far our cars have driven our customers…”

Hopefully he’s not being overly ambitious — on either driverless cars or the debut of the Tesla Model 3.

As of this writing, John Divine was long AAPL stock. You can follow him on Twitter at @divinebizkid or email him at editor@investorplace.com.

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Article printed from InvestorPlace Media, https://investorplace.com/2015/11/tsla-stock-tesla-model-3-unveil-date/.

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