Tesla Model 3: Wall Street whispers, spy photos, and undercover video

Posted on April 03, 2016 by Matt Pressman

After getting a first-hand look (and test drive) in the Tesla Model 3, I came away quite impressed. Apparently, I'm not the only one. Elon Musk tweeted that Model 3 reservations had reached 276,000 by end of Saturday. The so-called Wall Street "whisper numbers" for Model 3 reservations were far more conservative. So what does all this mean for Tesla Motors [NASDAQ: TSLA]? We've got fascinating commentary from Wall Street and automotive industry analysts. In addition, featured below, we've uncovered some revealing spy photos and video of the Model 3 out "in the wild" on the streets of Los Angeles.

Above: Check out this Tesla Model 3 spied on the streets of Los Angeles (Reddit / Imgur: MichaelAmbrosi)

Wall Street analysts have weighed in on the Tesla Model 3: "We are simply awestruck by the demand surfacing for the Model 3... we had no idea the reservation orders would be this strong," wrote Stifel's analyst James Albertine.  Adam Jonas from Morgan Stanley also noted, "We are not aware of any precedent of this level of order interest for any other car on the first day of an unveil. And the orders kept coming throughout the evening of test drives. How many days will it take for the order book to cross 200k units? 300k units? For perspective, our [Morgan Stanley's] 2020 forecast for the company's total completed unit delivery total (Model S, X and 3) is just under 249k units or less than 1/2 Tesla's own targets."

Above: Tesla Model 3 parked on street in Los Angeles shopping area (Reddit / Imgur: MichaelAmbrosi)

Andrea James at Dougherty & Co reiterated a Buy rating on Tesla with a Wall Street-high price target of $500.00 (previously $355.00) describing the Model 3 as "history making." She explained: "At the end of his presentation, CEO Elon Musk did not drop the mic and walk away. But he could have," said James. "Because Tesla has changed the game again. In one day, Tesla generated at least 150,000+ reservations, representing an order book of $6bn in revenue, and generating $150mm in zero-cost capital from the $1,000 customer deposits. (Note that the 2010 IPO added $190mm to the balance sheet.)... [in addition] Tesla is solving a different set of equations than the rest of the auto industry," James added. "The disruption story builds."

Above: Another Tesla Model 3 "spy photo" on the street in Los Angeles (Reddit / Imgur: MichaelAmbrosi)

Global Equities Research’s Trip Chowdhry notes that: "Impressions from Test Ride: Fast; Superb handling; extremely comfortable – spacious... There are no traditional gauges in the Model 3...very simplistic and elegant." He went on to explain: “There is no way BMW, Porche, GM, Toyota, Honda or any other existing auto manufacturer can come even close to competing with Tesla Model 3…Model 3 has been designed for the iPhone generation consumer, whose lives are digitally super-centered... and competition is completely clueless.”

Above: Undercover video (Youtube: VorteXz Signals)

Outside of Wall Street, other automotive industry analysts gave opinions in an article titled, "Why Tesla's Model 3 should frighten Audi, Mercedes and BMW," Egil Juliussen, a director of research at IHS Automotive explained: "If there's that many people willing to put down $1,000, that's the indicator that they [Tesla Motors] hit it right." Max Zanan, CEO of IDDS Group, an automotive consulting firm puts all this into context: “About 116,000 plug-in [electric] cars were sold in the U.S. in all of 2015. Tesla just pre-sold more than double that in 24 hours.”

Youtube: Bloomberg Business

And Chris Robinson, an analyst with Lux Research explained: "Just a base [BMW] 3 Series with no options and the smallest engine is priced at $33,000. In both looks and performance this [Tesla Model 3] is a car that can certainly compete with that... the thing about electric cars is they're quick. Electric vehicles have instant torque, which internal combustion engines don't have, when it comes to acceleration, it's tough to beat an electric vehicle." Robinson concluded: "It's astonishing that people would put down $1,000 before even seeing the car... consumer enthusiasm for Tesla has always been very high. It's like the Apple of the auto world." 

Posted in Elon Musk, Model 3, Tesla, Tesla Model 3, TSLA


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