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Tesla Motors Inc (TSLA) Model 3 Production Ramp On-Track

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Tesla Motors Inc mass market upcoming Model 3 is expected to face no delays for its roll out according to Global Equities

Tesla Motors Inc.’s (NASDAQ:TSLA) Model 3 is being marketed as a mass market product and has therefore attracted a lot of concern. Tesla has not yet proven its production capabilities with its Model S and Model X customers having to wait years to get a hold of their model. Global Equities however is confident that the company’s production ramp is in position with new information surfacing regarding the amount of preparation Tesla has given to its newest model. The sell side has an Overweight rating on the company’s stock as well as a $385 price target.

According to a note from Trip Chowdhry of Global Equities, just a day before Tesla’s Model 3 event, the Model 3’s chassis design was already ready in 2015. The Model 3 event is where potential Tesla customers will get their first chance to get an eyeful of the newest model. Global Equities’ previous coverage has pointed out their views regarding how well Tesla has improved its production platform and learnt from its mistakes. The latest news however is regarding the fact that Tesla’s Model 3 chassis was designed by Aston Martin’s Chris Porritt who also worked on the chassis for the luxurious and futuristic Model X. Porritt has apparently been working on the chassis for the car since 2014 and is a well-respected designer.

Previous notes by Global Equities highlighted the fact that the Model 3 would be using steel instead of aluminum which would not only shed material, labor and production costs for Tesla but also simplify the production process and allow the rate of production to be doubled. While steel will add more weight to the car, the tradeoff is that steel workers are easy to find and cheaper with respect to aluminum. Steel also costs less and is not only easier to work but easier and more cost effective to repair in case of damage. All these factors will allow Tesla to roll out the car on time and ensure a smooth and fast production process.


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