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Tesla Motors ( TSLA ) will unveil its mass-market Model 3 soon, with the big reveal starting around 8:30 p.m. Online reservations began at 7:30 p.m. Earlier in the day, it dropped jaws. “There’s no lineup for vehicles in this day and age. Audi and BMW and Mercedes have to be awestruck — they just have to be,” Stifel auto analyst James Albertine told IBD in an afternoon phone interview. His team saw lines for Model 3 reservations stretching to the hundreds at some Tesla stores around Washington, D.C., and New York. He estimated about 30 to 40 reservations an hour in the spot checks. Back-of-the-napkin math would mean that if about 100 U.S. stores take 30 reservations an hour for nine hours a day, that’s 27,000 reservations representing $945 million worth of potential sales in the U.S. alone, and all before online reservations began. (But not all stores may have seen such traffic, nor may the traffic have flowed consistently through the day. And at a refundable $1,000 a pop, analysts say, reservations could see some attrition when the Model 3 finally starts to roll off the line in late 2017.) Launch Party Updates IBD is at the launch event at Tesla’s Los Angeles design studio, with a crowd of Tesla owners and journalists. CEO Elon Musk is expected to take the stage around 8:30 p.m. Pacific, along with a live webcast. Now taking online reservations! Order your Model 3 at https://t.co/8uVlhvzpu5 #Model3 pic.twitter.com/Rj1kn1CPol — Tesla Motors (@TeslaMotors) April 1, 2016 “Model 3 Unveil: Watch live tonight at 8:30pm Pacific,” Tesla says on its website. “Reserve online during the event.” At a starting sticker price of $35,000 before incentives, the Model 3 will sell for half the cost of the Model S and the Model X. Albertine expects pre-orders to come in “very strong” and that the stock “is going to be OK,” despite lofty expectations already built in. Tesla stock closed up 1.3% Thursday at 229.77, though it traded up to 233.50 in late trading ahead of the reveal. (IBD doesn’t rank the company highly at the moment, giving it a Composite Rating of just 28 out of a possible 99. It’s trading around where it was at the beginning of the year, after surging 63% from a February low.) Albertine sees the Model 3 impressing. After Tesla excelled in higher price bands with its current lineup, he expects the company to have “a really easy time taking over share” from internal combustion engine car brands in this new lower-price category. “The (Tesla) S is outselling the S Class,” Albertine said as a case in point, referring to Daimler ’s ( DDAIF ) Mercedes-Benz flagship sedan, with seven decades of development behind it. In 2015, Tesla’s Model S also outsold individual models from Volkswagen ( VLKAY ) units Audi and Porsche, as well as BMW, Tata Motors ’ ( TTM ) Jaguar and Toyota Motors ’ ( TM ) luxury brand Lexus in the U.S. large luxury vehicle category. And Albertine says that electric cars planned by other makers are unlikely to “merit any concern,” as Tesla’s cars are “that much better.” How many reservations will Tesla tally from its first day? “It’s not certain that we’ll know,” Albertine said, noting that Musk “tends to give numbers when the numbers are really good” and that if he doesn’t cite a number, its absence would “probably be viewed negatively.” How many Model 3 reservations will Tesla get this week? Global Equities Research analyst Trip Chowdhry is a bull on that. He predicted in a research note Wednesday, “Tesla Model 3 will break all the records in consumer tech in dollar terms for pre-order bookings.” He says it is widely believed that bookings could reach 100,000 by the end of the weekend, amounting to “$3.5 billion worth of pre-orders.” But, Albertine notes, “(it’s) important to keep in mind what’s real is the Model S and X, and the Model 3 is many, many quarters away from being production-ready.” Scalper1 News
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