Tesla Model 3 to be unveiled on 31 March

The company in the past has overestimated its delivery projections, and demand for electric cars may be sluggish if gas stays stubbornly cheap.

The Model 3 – Tesla’s first mass market auto – is a big reason why Musk thinks the company could deliver 500,000 vehicles a year by 2020.

The first Model 3 vehicles are expected to be delivered in late 2017, according to Tesla’s letter to shareholders.

As a result, shares rose in after-hours trading Wednesday up 14% at one point – despite the earnings miss.

Knowing that people will soon be able to buy an electric vehicle with pricing focused on the masses is sure to send shockwaves through the auto market, and no doubt this will force rival carmakers to rethink their strategy. That expectation was proven at least partially untrue by Tesla’s shipping forecast. The bare minimum sales this year would amount to 80,000 vehicles, Tesla said.

Tesla said revenue rose 27 per cent to $1.2 billion for the fourth quarter.

Tesla has now confirmed that the Model 3 will retail for $35,000, this is before rebates and incentives which will actually bring the price of this new EV down to around $30,000. Musk had previously said that Model 3 would be shown in March 2016, but now he has announced a specific date.

The company also said its reservations for the new Model X crossover increased 75% in fourth-quarter (4Q), although the company sold only 206 of these vehicles in this period. Still the stock spiked up on positive comments from the company’s CEO Elon Musk. Ben Kallo, an analyst with Robert W. Baird & Co, said that the Model 3 time line of late 2017 is vital.

General Motors is also coming up with electric version Chevy Bolt.

In the fourth quarter, Tesla’s net loss more than doubled to $320 million, hurt by the lower-than-planned Model X production. The company missed on earnings by a wide margin, reporting an adjusted EPS of -$1.29 against the Zacks Consensus Estimate of -$0.34.