Tesla Model 3

Tesla Model 3

Under SEC guidelines, Tesla Motors must release all known risk factors to its investors.

In Tesla's latest 10-Q filing, the Model 3 is front and center in the "risks" category.

Tesla openly admits that it has experienced delays in production of vehicles in the past and says that it could very well experience similar issues in association with the Model 3. The automaker further adds that it has "no experience to date in manufacturing vehicles at the high volumes that we anticipate for Model 3."

Obviously, Tesla is throwing a few red flags up for investors, but it seems that any Tesla investor that has stuck it out so far has made a tidy profit, so despite the risks, investors continue to jump on board.

Further down in the SEC filing, Tesla says that its target of mid- to late 2017 production of the Model 3 is contingent on lots of assumptions. These assumptions include:

  • that we will be able to develop, build and equip a new dedicated final assembly line for high volume production of Model 3 at the Tesla Factory without exceeding our projected costs and on our projected timeline
  • that we will be able to build and bring online the Gigafactory in a timely manner to produce high volumes of quality lithium-ion cells and integrate such cells into finished battery packs for the Model 3, all at costs that allow us to sell the Model 3 at our target gross margins
  • that the equipment which we select and install for Model 3 production will be able to accurately manufacture high volumes of Model 3 vehicles within specified design tolerances and with high quality
  • that we will be able to engage suppliers for the necessary components on terms and conditions acceptable to us and that we will be able to obtain components on a timely basis and in the necessary quantities to support high volume production
  • that we will be able to complete our design and engineering plans for Model 3 and deliver final component designs to our suppliers in a timely manner; and
  • that we will be able to attract, recruit, hire and train skilled employees, including employees on the production line, to operate our planned high volume Model 3 production facilities at the Tesla Factory and the Gigafactory
Here's a look at the pages from the SEC filing that deal specifically with Model 3 risks and production assumptions.

Tesla Model 3 Associated Risks

Tesla Model 3 Associated Risks

Tesla Model 3 Associated Risks

Tesla Model 3 Associated Risks