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Here's a Sneak Peek Into Tesla's (TSLA) Offerings for 2020

Zacks Equity Research

Tesla (TSLA) is off to a solid start in 2020, which makes investors more than happy. The electric vehicle (EV) pioneer has been on fire lately, hitting new highs regularly. Tesla surpassed the $500 mark lately, which helped the company to assume the throne of the most valuable U.S. auto maker ever. The company’s market cap is about $90 billion, which is nearly $5 billion more than that of General Motors GM and Ford F combined.

The company’s flamboyant CEO Musk was literally dancing with joy onstage during a ceremony held recently at the Shanghai Gigafactory, celebrating the delivery of the first China-built Model 3 cars to the public out of the factory. While the company is already riding high with record deliveries of Model 3 and ramped up production at Giga 3, various new product developments are underway. This can take Tesla to new heights.

In 2020, it is set to bring to market certain new models that are poised to boost the Zacks #2 (Buy) company’s earnings and help it maintain its momentum. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

New models that are expected to take off in 2020 include Model Y, Semi Truck, Roadster and Model S Plaid. Let’s take a closer look.

Model Lineup for 2020

Tesla Model Y: The much awaited Model Y, which is expected to be out for delivery soon, piqued the curiosity of EV enthusiasts since it was first unveiled in March 2019. At that time, the vehicle was scheduled to be launched in autumn 2020, but later Tesla announced that the crossover will be available in summer itself. However, it seems that the company might release the Model Y ahead of its summer launch window. Just a few days back, Tesla Model Y received its CARB (California Air Resource Board) certification, hinting at a stellar range (higher than the earlier advertised range of 280 miles per charge). This is one of the formalities that automakers have to complete ahead of starting deliveries of new vehicles. Tesla’s receiving of the CARB certification signals that the EV pioneer is getting closer to start deliveries of Model Y.

The highly-anticipated launch of Model Y, a small crossover vehicle, is expected to boost the company’s prospects. Basically Model Y is a smaller, compact and a more reasonable version of Model X. Margin expectations for Model Yare higher than its highly popular Model 3. While production costs are expected to be same for both, Model Y is priced higher than Model 3 due to extra room, larger size and a hatchback. With a range of more than 300 miles per charge and seating capacity of 7 adults, Model Y would be offered in three variants. The Rear-Wheel Drive Long Range version will retail at $48,000. The Dual Motor All-Wheel Drive Long Range and the Performance version will be sold at $52,000 and $61,000, respectively. 

Tesla Semi: Tesla had made headlines when it unveiled the all-electric heavy duty truck, Tesla Semi, in 2017. While the company was initially slated to begin production of the same in 2019, it later postponed it to 2020. The leading EV maker will commence limited production phase of Tesla Semi in second-half 2020. Interestingly, the all-electric Tesla Semi has the potential to disrupt the huge U.S. trucking industry.

Semi’s appearance seems inspired by Japan’s bullet trains. In true Tesla style, the vehicle is loaded with superior technology specs. Semi would be powered by four independent electric motors based on the ones that power the Model 3. Thanks to its four electric motors, the vehicle can achieve 0-60 mph acceleration in 5 seconds flat without a trailer. What’s more impressive is that, even when fully loaded, Semi can hit highway speeds at about 20 seconds. Initially, Musk said that Semi would be offered in two variants, with either 300 mile or 500 mile versions, for $150,000 and $180,000, respectively. However, later Musk said that the longer-range version might deliver around 600 miles on a fully-charged battery. Tesla Semi is set to offer a drag coefficient of 0.36, which is simply amazing!

Tesla Roadster:  The long-awaited next-gen Tesla Roadster, which was unveiled in 2017, is also likely to hit the roads this year. While Roadster is not the company’s priority, Tesla targets to launch the same in 2020, especially after its impressive prototype in 2017. While Musk had promised at the Tesla Design Studio event in 2017 that the $200,000 priced Roadster will be on sale in 2020, he neither confirmed nor delayed the production timing of the vehicle when asked about the Roadster program last year. However, he did hint at a potential production volume for Roadster saying “it’s probably not more than 10,000 units per year.”

Notably, Musk has billed Roadster as the “dessert” of the company’s upcoming product lineup. The super fast EV will offer 1.9-second 60mph dash with top speed of more than 250 mph. It will sport 200 kWh battery packs providing 630 miles of highway driving range. One of the most exciting features of Roadster is the SpaceX option package, which will include 10 small rocket thrusters arranged seamlessly around the cars. This will drastically improve braking, acceleration and speed.

Tesla Model S Plaid: During the third-quarter 2019 earnings call, Musk confirmed that it would continue the production of Model S for sentimental reasons. Model S is Tesla’s flagship vehicle and will remain so, considering Musk’s statements. A three-motor track-ready version of Model S is on its way. The company is working to introduceits new “Plaid” tri-motor Powertrain to Model S, which is expected to breathe life into Model S, which is struggling amid the huge popularity of Model 3 vehicles.Currently, the biggest battery pack offered by Model S is 100 kWH unit. However the Plaid variant will sport a bigger battery pack.The track-capable, aerodynamically optimized Plaid variant will retain the classic look of Model S.

Tesla Model S Plaid units are set for production around summer 2020 and will be available for sale this year. While the price of the vehicle has not been revealed, Musk said that it will be lower than the competitors, hinting at Volkswagen VWAGY Porsche’s Taycan Turbo with base price of $150,900. In this regard, Model S Plaid is expected be lower than $150K, probably somewhere between $120K and $150K.

Are Tesla Batteries Also on the Way?

With Tesla having the biggest battery factory in the world, it is difficult to think that it does not manufacture its own battery cells. But that’s true! However, that could change soon as the chances of Tesla getting into battery production are quite high. Tesla acquired several battery-manufacturing companies in 2019, including Maxwell Technologies and Hibar Systems. Last year, Musk said that the company is working on new battery packs that will last for 1 million miles. To quote him ““The new battery pack that is probably going to production next year is designed explicitly for 1 million miles of operation.”.

Tesla’s acquisitions and Musk’s comments on battery manufacturing seem to signal that it’s going to soon build its own battery cells.Tesla-watchers expect the company to make an announcement of bringing a new battery to the market at a Battery and Powertrain Investor Day event that will be held early this year.

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