The Big Risk in Tesla's Model 3 Launch

Volvo XC90 front crash

Volvo XC90 front crash

With the Model 3 officially being shipped on time, it is looking more and more likely that investors will continue to pile into this stock, with the hope that revenue and profitability targets fall in line.

But the Model 3 is more than just an electric auto.

That could be a stretch for some buyers, especially since there are limits on the $7,500 US tax credit for electric cars.

In February, an employee wrote a post in Medium make several allegations over Tesla treating its factory workers poorly.

Tesla is now offering two different iterations of the Model 3. What Tesla is looking to do is offer a seamless experience of driving an electric vehicle.

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"Owners of the more expensive Models S and X are generally more willing to tolerate problems because they have other vehicles they can drive while their Tesla is in the shop", said David Sullivan, a senior consultant with AutoPacific. The experience influenced the auto maker's decision to radically simplify the design and customization options for Model 3.

The compact Model 3 may not entice a global market that's increasingly shifting to SUVs, including all-electric SUVs from Audi and others going on sale soon.

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. But mainstream buyers will be less forgiving.

Musk tweeted his replies to a number of questions on Twitter, starting with his response to a tweet that said he had "an wonderful life". It's made primarily of steel, not aluminum.

Still, Musk said he's expecting "at least six months of manufacturing hell" as the Model 3 ramps up to full production. But even at that pace, Tesla will remain a small player. The company has lost money during all but two quarters since going public - and was in the black, only then, by using its own, non-standard accounting methods. Toyota Motor Corp. made more than 10 million vehicles previous year. Murdoch and Rice earlier this month had been brought to the board as a compromise by Musk following shareholder pressure to have a more balanced perspective not beholden to Tesla management. For the style conscious, there's always the S and X, provided they're willing to pay the much higher price. "Now all of a sudden, EVs are real, practical vehicles that can be used for anything", he said.

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