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Tesla (TSLA) to Build Motor for Model 3 in Gigafactory
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Tesla Motors, Inc. (TSLA - Free Report) announced plans to invest $350 million in the Gigafactory in Nevada for the production of drivetrains, mainly electric motors and gearboxes for the Model 3 mass-market vehicle. This investment will also lead to job creation for about 500 workers.
Tesla manufactures Model S sedan and Model X SUV in its Fremont plant. Model 3 drivetrain will be produced in Nevada. However, the distance between Fremont and Gigafactory is almost 250 miles which may lead to logistic issues for the company.
Tesla is building the Gigafactory to deal with the shortage of lithium-ion batteries. The automaker will receive tax incentives of $1.3 billion over a period of 20 years from the Nevada government for the construction of the factory and hiring of 6,500 workers in the state. This investment and hiring strategy will help the automaker achieve its job creation goal.
Further, the company’s latest decision will support President-elect Donald Trump’s plans to boost production and employment in the U.S.
Tesla’s third-generation electric car, Model 3, which costs half as much as Model S, is expected to be delivered from late 2017. The vehicle offers a range of 215 miles per charge and acceleration of 0–60 mph in less than 6 seconds. However, Tesla is facing high pressure for Model 3 delivery due to intensifying competition. Other automakers are modifying their existing electric vehicle portfolio as new companies enter the market.
Tesla has been underperforming the Zacks categorized Auto Manufacturers-Domestic industry for over a year. In the past one year, Tesla gained 20% while the industry witnessed a 25.9% rise. The company’s new Master Plan, rapid international expansion and continued investment in infrastructure development are major positives. The Gigafactory construction should also prove beneficial.
Fox Factory has an expected earnings growth rate of around 16.6% for the current year. Oshkosh has a long-term growth rate of 8.4% while the same for GKN is pegged at 6.3%.
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Tesla (TSLA) to Build Motor for Model 3 in Gigafactory
Tesla Motors, Inc. (TSLA - Free Report) announced plans to invest $350 million in the Gigafactory in Nevada for the production of drivetrains, mainly electric motors and gearboxes for the Model 3 mass-market vehicle. This investment will also lead to job creation for about 500 workers.
Tesla manufactures Model S sedan and Model X SUV in its Fremont plant. Model 3 drivetrain will be produced in Nevada. However, the distance between Fremont and Gigafactory is almost 250 miles which may lead to logistic issues for the company.
Tesla is building the Gigafactory to deal with the shortage of lithium-ion batteries. The automaker will receive tax incentives of $1.3 billion over a period of 20 years from the Nevada government for the construction of the factory and hiring of 6,500 workers in the state. This investment and hiring strategy will help the automaker achieve its job creation goal.
Further, the company’s latest decision will support President-elect Donald Trump’s plans to boost production and employment in the U.S.
Tesla’s third-generation electric car, Model 3, which costs half as much as Model S, is expected to be delivered from late 2017. The vehicle offers a range of 215 miles per charge and acceleration of 0–60 mph in less than 6 seconds. However, Tesla is facing high pressure for Model 3 delivery due to intensifying competition. Other automakers are modifying their existing electric vehicle portfolio as new companies enter the market.
Tesla Motors Inc. Price
Tesla Motors Inc. Price | Tesla Motors Inc. Quote
Price Performance
Tesla has been underperforming the Zacks categorized Auto Manufacturers-Domestic industry for over a year. In the past one year, Tesla gained 20% while the industry witnessed a 25.9% rise. The company’s new Master Plan, rapid international expansion and continued investment in infrastructure development are major positives. The Gigafactory construction should also prove beneficial.
Zacks Rank & Key Picks
Tesla currently carries a Zacks Rank #3 (Hold).
Better-ranked companies in the auto space include Oshkosh Corporation (OSK - Free Report) , Fox Factory Holding Corp (FOXF - Free Report) and GKN plc . All the stocks carry a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Fox Factory has an expected earnings growth rate of around 16.6% for the current year. Oshkosh has a long-term growth rate of 8.4% while the same for GKN is pegged at 6.3%.
Zacks’ Best Private Investment Ideas
In addition to the recommendations that are available to the public on our website, how would you like to follow all Zacks' private buys and sells in real time?
Our experts cover all kinds of trades… from value to momentum . . . from stocks under $10 to ETF and option moves . . . from stocks that corporate insiders are buying up to companies that are about to report positive earnings surprises. You can even look inside exclusive portfolios that are normally closed to new investors. Starting today, for the next month, you can have unrestricted access. Click here for Zacks' private trades >>