Does Tesla’s Model 3 Launch Make It a Buy?

With the much anticipated Model 3 set to be released this week, current and potential investors in Tesla Inc. (NASDAQ:TSLA), the world’s up-and-coming electric vehicle manufacturer, are awaiting the results of the Model 3 rollout to determine whether an investment in Tesla is warranted, given concerns about the EV manufacturer’s market capitalization and valuation relative to its larger and more established peers.

Management’s execution of the Model 3 mass market implementation will be under the microscope, and it stands to reason that long-term investors will need to see more from Tesla in terms of profitability and other long term fundamental metrics to coincide with market share growth and volume.

Tesla is expected to win big in terms of market share over the coming years, with the Model 3 being one of the most sought after vehicles on the market today. A massive waitlist for the car has resulted in owners wishing to put their name in today for one of these vehicles waiting until 2019 to receive theirs – a positive sign from a market demand standpoint, and also a signal that production will need to significantly increase to meet market demand moving forward.

With large investments in automation, Tesla is working to reduce its operating costs over time and eventually become profitable. The ability of investors to wait for such profitability, and determine just how big Tesla will eventually become compared to its peers, will determine much of the volatility in the EV automaker’s share price moving forward.

Invest wisely, my friends.