Tesla 3 Pre-Orders, Sales Skyrocket

Associated Press

Tesla stock keeps rising as Model 3 reservations top 276,000 - Tesla Motors (TSLA) stock climbed 4% Monday, compounding Friday's gain as reservations for its new Model 3 electric car soared far beyond views.

CEO Elon Musk tallied 276,000 reservations by the beginning of Sunday and said he'd give another update Wednesday. The pre-order period opened Thursday ahead of a Thursday-night reveal event.

Musk said in Twitter posts that  he’s definitely going to have to rethink production planning. Tesla had expected only one quarter to one half of the 115,000 reservations that came in before anyone even got to see what the car looked like.

The refundable reservations are $1,000 each and worth $11.6 billion dollars in revenue if everybody were to go through with a purchase.

“While there was clearly a lot of excitement and optimism around both the car and the company, roughly one-third of the respondents we talked to sounded undecided on whether they would actually purchase when the option came up in two years," Pacific Crest Securities analyst Brad Erickson said in a research note written Friday and distributed late Sunday.

The focus now is on how all the numbers -- and Tesla stock -- will play out. The company has just effectively crowdfunded more than a quarter billion dollars from reservations. That’s more than it raised in its IPO.

The 276,000 reservations worldwide also tops the number of electric and plug-in hybrid vehicles sold around the U.S. in the last two years by the entire auto industry. And it’s more than the 245,000 BMW passenger cars sold in the U.S. last year. Tesla delivered almost 51,000 electric vehicles -- its Model S sedan and Model X crossover -- last year worldwide.

Tesla Stock Analysis
Going into Monday, Tesla stock was just below where it started 2016. It closed Friday at 237.59 after hitting its highest point since early October. The stock isn’t highly rated by IBD now, factoring in its history of losses and earnings, stock performance and other factors.

The Model 3 is the electric car meant for the entry-level luxury mass market, priced at $35,000 for the base model before any tax credits. Musk expects the average purchase price with add-ons to be $42,000. The car is seen as a challenger to BMW’s 3 Series and similarly priced models from Daimler’s (DDAIF) Mercedes-Benz, Volkswagen’s (VLKAY) Audi and Toyota’s (TM) Lexus, as well as electrics like General Motors’ (GM) Chevrolet Bolt EV.

Among the many things analysts and investors will be deconstructing is how much content from Tesla's tech partners Nvidia (NVDA) and Mobileye (MBLY) go into the Model 3. Nvidia chips power the entertainment console in Tesla's current vehicles. Mobileye is a maker of camera-based advanced driver assistance systems, and its technology is used by Tesla in conjunction with Autopilot self-driving car features.