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Tesla Chief Executive Elon Musk tweeted on Friday that the Model
3, which is slated to go into production in late 2017, will sell
at an average price of $42,000, including the price of options
and additional features, which would give the initial flurry of
orders an estimated retail value of $10.6 billion.
That intense interest, fanned in part by a steady stream of
tweets by Musk, could help boost Tesla's stock price, which
closed Friday at $237.59, up 3.4 percent. The stock has soared
more than 60 percent since hitting a 12-month low in February.
The car's average selling price projected by Musk is well above
the $35,000 base price. Analysts earlier had estimated the first
Model 3s off the factory line in Fremont, California, could be
loaded with extra equipment and sell for $50,000 to$60,000.
Tesla has undertaken a costly expansion of the Fremont plant,
aiming to boost annual capacity to 500,000 by 2020, with
production of the Model 3, the company's first mass-market car,
ramping up slowly through 2019.
Some analysts said the company could have trouble filling all
the initial Model 3 orders, which are accompanied by a
refundable $1,000 deposit, until 2020.
Barclays analyst Brian Johnson on Friday said the heavy influx
of Model 3 orders "sets the stage for an equity offering" later
this year by Tesla, much of which would go toward factory
construction and product development.
Johnson had estimated Tesla could take 250,000-300,000 orders
for the car by the end of June.
Musk unveiled a prototype of the Model 3, a smaller companion to
the Model S sedan and Model X utility vehicle, amid considerable
fanfare on Thursday night.
Some prospective buyers who placed early orders may have
anticipated paying a lower price for the Model 3 after factoring
in a $7,500 federal tax credit on electric cars. But that credit
begins to phase out once manufacturers sell more than 200,000
EVs - a mark that Tesla, at its current sales pace, is likely to
surpass next year before the first Model 3 is delivered.
(Reporting by Paul Lienert in Detroit; Editing by Alan Crosby)
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