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Tesla Model 3 release still gold for 2017; Model X demand a worry

by Todd Haselton | December 20, 2016December 20, 2016 11:30 am PDT

Despite some fears and reports that Tesla won’t be able to get its new and affordable Model 3 out to customers in 2017 as originally promised, one analyst now says the company is in shape to meet the deadline. Just last month, Morgan Stanley analyst Adam Jonas said Tesla’s Model 3 would debut in 2018.

The latest report, pushing confidence that Tesla will launch the Model 3 during the second half of 2017, comes from Pacific Crest’s Brad Erickson and Elliot Arnson. The report was obtained by Elektrek and comes after the duo of analysts recently sat down with some of Tesla’s top brass.

Apparently. Tesla’s execs were able to do enough convincing to prove to Arnson and Erickson that the car will arrive when it has said it will; others fear that the company will hit manufacturing snags, with delays on the horizon. Those aren’t uncommon for Tesla.

In fact, it’s a bit odd that the two expect the Tesla Model 3 will arrive when Tesla says it does, because the rest of their report highlights issues that the company has had with the Model X, noting that the car hit production issues that prevented Tesla from selling as many as it could have. The result is a decline in demand for that car and even the Model S. Keep in mind, however, that the Model S continues to gain in power, with software updates adding new autonomous features and other functions that, as they roll out may begin to ignite new consumer interest in Tesla and the cars it sells. There’s some trepidation even still from the Pacific Crest analysts.

“Tesla still faces two likely upcoming quarters of sequential declines in Model S deliveries, which bears will likely latch onto, and we think Model X demand is still lagging expectations,”  As a result, we need more confidence that these two factors are not indicating weaker underlying demand before getting more constructive with our rating.”

Can Tesla keep its promise?

If Tesla does indeed ship the Model 3 during the second half of 2017 as promised, it’s still likely that a bulk of the orders will ship the following year, or even later.

Todd Haselton

Todd Haselton has been writing professionally since 2006 during his undergraduate days at Lehigh University. He started out as an intern with...