Tesla (TSLA) Should Have No Problem Handling High Model 3 Production Demand - Analyst
While Tesla (Nasdaq: TSLA) CEO Elon Musk continues to report skyrocketing pre-order numbers for the Model 3, Global Equities isn't worried about the automaker keeping pace.
Analyst Trip Chowdhry said today that the Model 3 is designed with "Production First" mindset, which is a very different mindset from that of Model X.
The analyst also noted the following points:
- More than 60% of Tesla Model 3 body is made of Steel, the remaining some plastic polymer and Aluminum - this makes manufacturing very simple and straight forward
- Model 3 Roof is made of Complete Glass - this takes 1/10th the effort, with 1/100 of potential defects when compared to metallic roof - which makes production easy and fast
- Tesla Model 3 Body is made of self contained modules (Manufactured at TSLA Lathrop Facility) - this makes assembly extremely simple and fast
- Model 3 needs 1/3rd of the suppliers that Model S needed - Model 3 supply chain is 3x more efficient and simple vs. Model S - Hence supplier complexity is reduced by a factor of 3
- Hence, delivering first Tesla Model 3 by 4Q'2017 is easily achievable
Global Equities rates Tesla at Overweight with a price target of $385