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The Big Risk in Tesla's Model 3 Launch

02 August 2017

More than 30 percent of current Tesla owners in recent survey held reservations for the Model 3, according to a note sent Tuesday from Bernstein analyst Toni Sacconaghi. That makes the 3 a hugely significant vehicle, not just for the rest of the world, but for Bangladesh as well.

The California-based company aims to make 5,000 Model 3 sedans per week by the end of this year and 10,000 per week in 2018.

Even if everything were to go right, Musk previously had indicated all those now holding reservations likely wouldn't take delivery of a Model 3 for at least 18 months.

Tesla will also be using the Model 3 as an opportunity to scale up its manufacturing.

While the up-marketing strategy could deliver stronger profits and margins in the long run, the more immediate question is how quickly Tesla will be able to ramp up production. And a fully loaded Model 3 with 310 miles of range costs a hefty $59,500; the base model goes 220 miles (322 km) on a charge.

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Wall Street is expecting the electric auto company to report a second-quarter adjusted loss of $1.88 per share, which is a wider loss than the adjusted loss of $1.06 per share the company reported in the same quarter previous year.

Potential customers also could lose faith if Tesla doesn't meet its aggressive production schedule, or if the cars have quality problems that strain Tesla's small service network.

The first non-employee Teslas are expected to be shipped from October 2017. Both the Model S and the Model X SUV were delayed and then plagued with pesky problems, like doors that don't work and blank screens in their high-tech dashboards.

Meanwhile, Tesla's entry-level Model S - the 75D rear wheel drive - offers an estimated 249 miles, yet starts at just over $70,000. It has one dashboard screen, not two. But Fremont not only has to cope with production of three different vehicles but three completely different vehicle platforms, a challenge for even established automakers like Toyota or General Motors.

Musk opened up on Twitter after responding to a follower discussing his Instagram account, pointing out how the photos portray the Tesla and SpaceX founder's "amazing life". "Now all of a sudden, EVs are real, practical vehicles that can be used for anything", he said.