Tesla Inc (NASDAQ:TSLA): Model 3 isn’t Upgrade from Model S

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Tesla Inc (NASDAQ:TSLA) is reminding investors and buyers that they should not expect the Model 3 to be as advanced as the Model S, according to a report from Recode.

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“We want to be super clear, the Model 3 is not version 3 of our car,” Tesla CEO Elon Musk said during the earnings call. “The Model 3 is a smaller, more affordable version of the Model S with fewer features.”

In a letter to investors, Tesla said:

“We have seen a belief among some that Model 3 is the newest and more advanced generation of Model S. This is not correct. Model S will always have more range, more acceleration, more power, more passenger cargo room, more displays (two), and more customization choices, and Model S, X and 3 will all have equivalent Autopilot functionality. We will continue to clearly communicate these distinctions to avoid any misperceptions.”

On the earnings call, Musk said:

“If you want to upgrade you should buy the latest Model S.”

Tesla Inc (NASDAQ:TSLA) is set to release the Model 3 later this year. The electric sedan has been touted by Musk as a smaller, less expensive version of the Model S. It will be offered at $35,000, compared to $68,000 for the Model S.

Tesla said that it is on track to start production on the Model 3 in July. The automaker expects to produce 5,000 cars a week “at some point in 2017.” The company’s main goal is to boost the production to 10,000 vehicles a week “at some point in 2018.” Tesla expects to deliver 47,000 to 50,000 vehicles in the first half of 2017.

Tesla had received around 400,000 pre-orders for the Model 3.

Meanwhile, shares of Tesla Inc (NASDAQ:TSLA) are up more than 52% so far this year. During the last 12 months, the company’s stock has surged more than 45%.

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