In what’s sure to be a spectacle that rivals the unveiling of new consumer technology products from an infallible Apple Inc. (NASDAQ:AAPL), on Friday of this week Tesla Inc (NASDAQ:TSLA) will be handing over the keys to the owners of the first thirty Model 3 electric vehicles ever made.
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It’s an event that has already captured the hearts and minds of the company’s fans, not to mention current and would-be owners of TSLA stock.
The two groups are looking for different things, mind you. The former loves the premise of an uber-cool electric car, while the latter group is patiently waiting to see just how marketable the battery-powered car is at its targeted starting price of $35,000 each.
Whatever the case, it’s going to be fun.
Finally Some Answers From TSLA?
This Friday, the 28th — at 7:00 pm PST — Tesla be deliver the first 30 Model 3’s to their buyers at what’s certain to be a night to remember. The launch party to be held at its Fremont, California factory promises to one heckuva publicity event, complete with a pre-event party.
Actually, only 29 Model 3’s will be given to their originally assigned owner. The very first one was allocated to Ira Ehrenpreis, who opted to give his to Elon Musk a as gift. Nevertheless, the party will not only mark the official Model 3 launch, it will serve a something of a crowning achievement for the company.
Earlier this year, when Elon Musk first promised the Model 3 would go into production by the end of July, doubts surfaced. Musk had overpromised and underdelivered in the past, and the bold timeline didn’t feel realistic. Not that thirty vehicles is large-scale production, but in light of the fact that the company wasn’t producing any just a few weeks ago, it’s impressive progress.
Still, it’s a far cry from the 10,000 per week Musk has informed TSLA stock holders the company would be producing by 2018.
One thing that will become much more certain is exactly what the Model 3 will look like, inside and out, and what comes standard versus what’s extra … something Tesla has been mostly mute about thus far. Namely, the event should clarify the driving range of the vehicle’s battery, along with the cost of activating the Autopilot feature on the cars.
Also of interest will be the cost to owners to hook-up to the company’s supercharging network. Drivers of the Model S and Model X get some free charges, and then pay a small fee for electricity beyond a certain threshold. Owners of the cheaper Model 3 aren’t supposed to get any sort of freebie on that front though, and will have to pay for every kilowatt of fast-charging at Tesla’s supercharging sites.
Perhaps more than anything though, investors will be looking to get a feel for what a buyer gets at $35,000, and how much more it will cost for a loaded version.
Bottom Line for TSLA Stock
While most publicity events are able to move the underlying stock for a couple of days and are then forgotten, this one is apt to create a longer-lived effect.
In many regards, the Model 3 launch is a pivotal moment for Tesla, marking a transition from an incubator to a mass-market, full-scale operation. Even going back to the time when Tesla’s only project was the ultra-cool and completely unprofitable production of the Roadster, Musk’s vision was to create an electric car that wasn’t just built for the average driver, but marketable to the average car-buyer. The Model 3 is that car. Consumers will either like it, or they won’t.
It won’t take investors very long to figure out how those consumers are going to view the car, and trade accordingly. Buckle up, because either way, a bunch of traders are going to be vindicated and a bunch of other traders are going to wind up heartbroken. As of the latest tally, 30% of the stock’s float is held as short positions, which are bets the stock is going to move lower.
As of this writing, James Brumley did not hold a position in any of the aforementioned securities.