A New Model Will Not Help Tesla

By Douglas A. McIntyre Updated Jan 11, 11:22PM EST · Published May 21, 6:55AM EDT

Follow 24/7 Wall St. on Google

This post may contain links from our sponsors and affiliates, and Flywheel Publishing may receive compensation for actions taken through them.

A New Model Will Not Help Tesla — © courtesy of Tesla Inc.

Elon Musk said in a series of tweets that Tesla Inc. (NASDAQ: TSLA) will launch a new, powerful and feature-packed version of its new Model 3. Among other things, it will have dual engines and is better than a BMW M3 ultra-fast sports car.

The announcement won’t cool down upset investors at all. As a matter of fact, it may enrage them. Investors want sales, and Tesla continues to disappoint.

Musk’s tweets:

[nativounit]

There is no question about the car’s innovations. However, there will not be a large market for a $78,000 Model 3. The car has a base price of about $35,000. It is Tesla’s appeal to the masses, and the only way the company has to push sales into the hundreds of thousands of vehicles a year. That has been the financial promise of Tesla: it will become a mainstream car company that dominates the electric car sector.

A new car will not cloud the issues Tesla faces. Among these are slow production of the Model 3 and worry the company will need to raise large sums of money this year. Musk says Tesla will not have to raise any more money, which adds to concerns he does not have a realistic view of the future of his own company.

The new Tesla sounds like a great car that will sell very few units. The makes the announcement almost worthless.

[recirclink id=464125]

[wallst_email_signup]

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.