Tesla CEO Elon Musk Kevork Djansezian, Getty Images

Tesla Schedules Model 3 Release for March

The quarterly shareholders letter from CEO Elon Musk reported a $230 million loss, but the firm release date for the lower-priced Model 3 was enough to send stock flying up 9% in after-hours trading.

The new Tesla Model 3 electric car, which is aimed not at the wealthy but at the more average car buyer, finally has an official release date: March 2016.

Tesla revealed the news in a letter to shareholders — which also reported a loss for the third quarter of $230 million on revenues of $937 million — and that helped shares surge 9% to $227.10 in after-hours trade on hopes that the small but fast-growing electric carmaker would be able to boost production and add more affordable cars soon.

The Model 3, whose price is estimated at $35,000 or about half the cost of any other Tesla, is seen as key to expansion for the carmaker that has a loyal following among well-heeled buyers.

Over the past quarter, Tesla produced a record 13,091 vehicles, despite a one-week shut down and delivered 11,603, also a record, amid the launch in September of its Model X sport utility vehicle.

The company said it expects to deliver between 50,000 and 52,000 cars for 2015, following earlier estimates of 50,000 to 55,000. One of the reasons is the shortage of parts for its new Model X vehicle. Global orders for its Model S, meanwhile, increased by more than 50% from a year ago, helped by expansion in new markets including China.

“We expect order growth in China to remain strong with more store openings and the recent policy changes in Beijing and other major cities that allow buyers of Tesla vehicles to bypass license plate restrictions,” CEO Elon Musk and finance chief Deepak Ahuja wrote in the letter.

“Our customers and reservation holders are enthusiastically embracing the new features of Model X,” which includes “falcon wing doors” and a panoramic windshield and starts at $130,000.

Tesla also said construction of its “gigafactory” to produce batteries in Nevada was ahead of schedule and would begin production by the end of 2016.

Tesla’s software update added autopilot to thousands of its Model S cars already on the road. Autopilot allows Model S to steer within a lane, change lanes by tapping a turn signal and manage speed using “traffic-aware” cruise control.

Tesla’s cars have been in high demand despite a price tag of $70,000 and up, and the vehicles have won unusual praise until a recent Consumer Reports review that highlighted problems with the Model S.

Copyright Agence France-Presse, 2015

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