Deliveries at low end of Tesla’s forecast
Model 3s will reach customers this month
NEW YORK — The first Tesla Model 3 electric car for the masses should come off the assembly line on Friday with the first deliveries in late July, the company’s CEO says.
CEO Elon Musk, in several Twitter messages early Monday, said the new car passed all government regulatory requirements for production to begin two weeks ahead of schedule. The company plans to hold a party to hand over the first 30 Model 3s to customers on July 28, Musk wrote in a tweet.
The Model 3 is to start around $35,000, and with a $7,500 federal electric car tax credit, could cost $27,500. Tesla says the five-seat car will be able to go 215 miles on a single charge and will be sporty, accelerating from zero to 60 miles per hour within six seconds.
Musk tweeted that the company expects to produce 100 cars in August and more than 1,500 in September. “Looks like we can reach 20,000 Model 3 cars per month in December,” he wrote.
That figure is less than previous estimates. Musk earlier had said Tesla would make 10,000 Model 3s per week by December.
Musk’s tweets appear to erase doubts that Tesla would be able to meet deadlines for mass producing the cars, which is key to the company making money. Previously it
TESLA
crushed forecasts made at the start of the year. But few are willing to bet the strong pace will continue.
“All the relevant parties have a hard time with the longer-term view about how sustainable this growth is,” said David Katz, a gaming analyst for Telsey Advisory Group.
Chinese president’s visit
Wall Street banks had forecast June growth of 30 percent. The miss was likely caused by a one-off event rather than weak economic fundamentals. The June growth rate was still the best since February 2014.
“We believe the (miss) mainly came from a sharp and likely temporary demand slowdown in the past week, given President Xi Jinping’s visit to Hong Kong and heightened security concerns in the region,” JP Morgan analysts wrote in a note published Monday.
Hong Kong is located just 40 miles from Macau and accounts for 20 percent of all visitors to the Chinese gaming peninsula. Xi arrived in Hong Kong on June 29 to celebrate the 20th anniversary of England handing over control of the former colony to China. He departed July 1.
Gaming revenue growth doesn’t seem to have been affected yet by new anti-corruption measures. Banks have begun rolling out ATMS with facial recognition on the gaming island.
“While it is still early days, we do not believe these measures will deter visitation to Macau nor a drop in ATM use,” Union Gaming said Monday. “It is likely that any individual who might be deterred by ATM measures has already stopped coming to Macau over the last few years.”
Slower growth
Macau gaming revenue is set to slow in the second half because of comparisons. Macau posted its first monthly rise in gross gaming revenue in August 2016 after more than a two-year decline driven by the start of a corruption crackdown.
JP Morgan expects gaming revenue to rise 11 percent in the third quarter and only 4 percent in the fourth quarter. Union Gaming is a bit more optimistic, forecasting 15 percent and 7 percent growth, respectively.
The slowdown could be sharper if the Chinese government puts the brakes on easy credit and housing price growth. Home prices in most major cities are up about 10 percent over the past 12 months. There is a strong correlation between the Chinese housing market and VIP gaming revenue growth.
“We believe this recovery could stall once the stimulus from loose credit and the Chinese housing bubble wears off — as it did in 2013 and 2014,” Wells Fargo said in a recent note.
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Contact Todd Prince at tprince@ reviewjournal.com or 702-383-0386. Follow @toddprincetv on Twitter.