Can Tesla Deliver 500,000 Cars?

By Douglas A. McIntyre Updated Jan 13, 2:52AM EST · Published Oct 3, 8:55AM EDT

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Can Tesla Deliver 500,000 Cars? — © courtesy of Tesla Motors Inc.

Tesla Motors Inc. (NASDAQ: TSLA) delivered 24,500 cars in the third quarter, up 70% over the second quarter. It built 25,185, up 37% over the same period. The Tesla numbers are impressive, but not nearly what is needed to hit the company’s goal of 500,000 deliveries in 2018. Its ability to hit that number will be crucial to answering the question of whether Tesla eventually will be a viable company, and whether it can hold off new electric cars that have started to enter the market.

The sharp climb will depend on the new, inexpensive Model 3. Tesla has 370,000 back orders for the Model 3. However, it has not produced a single one.

Among the barriers to reach the 500,000 sales per year is that Tesla needs more money. It is hard to say what the sum will between now and 2018. As Tesla buys SolarCity Corp. (NASDAQ: SCTY), founder Elon Musk admitted his treasury is close to empty.

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The other block to Tesla’s goal to reach 500,000 is the opening date for its Gigafactory. Without it, Tesla cannot produce the lithium-ion batteries it needs. Without them, the preorders of the Model 3 become unimportant.

Finally, unless Tesla can keep up its white-hot growth, it faces harsh competition from every major car company in the world, eventually. General Motors Co. (NYSE: GM) is first among these. It has released its Chevy Bolt, which is priced below $40,000. That is the Model 3’s sweet spot.

Tesla has a long way to go to reach its 2018 goal.

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About the Author Douglas A. McIntyre →

Douglas A. McIntyre is the co-founder, chief executive officer and editor in chief of 24/7 Wall St. and 24/7 Tempo. He has held these jobs since 2006.

McIntyre has written thousands of articles for 24/7 Wall St. He is an expert on corporate finance, the automotive industry, media companies and international finance. He has edited articles on national demographics, sports, personal income and travel.

His work has been quoted or mentioned in The New York Times, The Wall Street Journal, Los Angeles Times, The Washington Post, NBC News, Time, The New Yorker, HuffPost USA Today, Business Insider, Yahoo, AOL, MarketWatch, The Atlantic, Bloomberg, New York Post, Chicago Tribune, Forbes, The Guardian and many other major publications. McIntyre has been a guest on CNBC, the BBC and television and radio stations across the country.

A magna cum laude graduate of Harvard College, McIntyre also was president of The Harvard Advocate. Founded in 1866, the Advocate is the oldest college publication in the United States.

TheStreet.com, Comps.com and Edgar Online are some of the public companies for which McIntyre served on the board of directors. He was a Vicinity Corporation board member when the company was sold to Microsoft in 2002. He served on the audit committees of some of these companies.

McIntyre has been the CEO of FutureSource, a provider of trading terminals and news to commodities and futures traders. He was president of Switchboard, the online phone directory company. He served as chairman and CEO of On2 Technologies, the video compression company that provided video compression software for Adobe’s Flash. Google bought On2 in 2009.