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Nate Johnstonbaugh | nrj6@psu.edu | March 1, 2019
On Thursday, Tesla (TSLA) announced that the Model 3 sedan with a starting base price of $35,000 excluding incentives currently being given out (but being phased out) by the government. This is big news because they announced a target price of $35,000 in 2016, and it hadn’t reached that price point until a couple of days ago. Additionally, they announced that it has a range of 220 miles, and there is a model with a different interior and slightly more range. Going forward, purchases of the Model 3 will only be possible online, due to the 7 day, 1,000 mile return.
However, Elon Musk prepared investors for disappointment, as he warned that the expected profitable first quarter was not likely to occur. The share price has been reflecting the ongoing red numbers, dropping from a high of nearly $368 in December. While the future of Tesla remains uncertain, investors did react positively originally to the news of the affordable line of Teslas being ready to be ordered, but shares dipped back down after hours on Thursday.
The long wait for the highly anticipated, consumer friendly Model 3 should be catching everyone’s attention, whether you like Tesla or not. This is going to force other car companies to develop electrically powered cars that can keep up with their competition if they wish to stay relevant going forward. As technology begins to leave gasoline fueled cars in ancient times, an affordable electric powered car could dominate the market in upcoming years, assuming that Tesla can keep up with production. If the Model 3 sedan is a success, I predict sales will increase, allowing for profits and increased growth and domination throughout the automobile industry.
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