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Tesla Model 3 gets boost from predicted ‘positive surprise’

Just days after a Morgan Stanley analyst downgraded Tesla’s stock over problematic production of the Model 3 sedan, another analyst is predicting a profitability “surprise.”
Last week, Morgan Stanley’s Adam Jonas took aim at the Model 3’s design, manufacturing process, and automation levels, saying they could “ weigh against the profitability of the vehicle.”

To the contrary, the reduced labor the Model 3 requires compared to Tesla’s Model S sedan and Model X SUV, along with capital and materials-use efficiencies, should let Tesla easily achieve a 25 percent profit margin, Berenberg analyst Alexander Haissl said in a note to clients, according to CNBC.
“Haissl said the Model 3 has significantly lower material costs versus the Model S since it uses a less-expensive electric motor and takes away features such as an air suspension and aluminum body,” CNBC reported .
“He also estimates the labor content is about $1,000 per car for the Model 3 versus more than $4,000 for the Model S due to ‘higher levels of automation and lower in-sourced content.'”

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The Model 3 — now being shipped to customers in a premium version but intended to become a car for the masses with a $35,000 price — has suffered from production delays . Many analysts see widespread sales of Model 3s as crucial to Tesla’s survival.
While Jonas had cut Morgan Stanley’s price target for Tesla stock to $291 from $376, Haissl in his note Friday upped Berenberg’s to $500 from $470, according to CNBC.
Tesla stock opened at $284.65 on Friday, and by Monday at around 10:30 a.m. had dropped slightly to $284.04.
In related news, the Palo Alto electric car maker led by CEO Elon Musk on Sunday posted a video on Twitter that purports to show how difficult it is for a Model X to roll over. The 14-second clip shows a Model X being pushed forcefully sideways during a crash test — it hits a sand-filled platform, tips onto its side, then falls back onto its wheels. Transportation blog Electrek pointed out that Tesla didn’t provide key information for assessing the value of the test: the speed at which the simulated crash occurred.
The National Highway Traffic Safety Administration has given the Model X a five-star rating in every safety category.
Because the batteries of Tesla cars are heavy and make up most of the undercarriage of the vehicles, they help keep the center of gravity low, a benefit in crashes that might cause a rollover.

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