Tesla Motors Inc. (NASDAQ:TSLA) has announced numerous plans for 2017. Next year will see the launch of the newest Tesla vehicle, the Model 3 sedan. The new model is its first electric car targeted at the masses. Tesla said it received 373,000 reservations for the sedan within a week of opening the preorders earlier this year.
Tesla hopes to sell the all-electric sedan for about $35,000, starting late next year. Production on the vehicle will begin in the fall. Musk has given Model 3 suppliers a July deadline to have their parts all ready to go.
Also planned for next year is the opening of Tesla’s gigantic battery factory. The company expects to bring its Nevada “Gigafactory” to full production by 2018. The batteries from Tesla’s Gigafactory are expected to increase efficiency for the company, lowering costs on both the automotive and stationary business sides.
Tesla closed its $2.6 billion merger with SolarCity Corp. in November. Tesla CEO Elon Musk exerted a lot of energy convincing shareholders that a merger was a positive move for both companies. He has said that the move will add to Tesla’s balance sheet. Musk is chairman and largest shareholder of both companies. SolarCity was founded and is run by his cousins, Lyndon and Peter Rive.
The SolarCity acquisition is a risky proposition for Tesla. SolarCity popularized leasing solar-power systems, so homeowners could install solar power and pay less per month with little money down. However, the company buried itself in debt paying for those systems. That debt is still on the books.
SolarCity’s bread-and-butter business, residential solar, is currently facing a declining market. The solar market as a whole is starting to slow down after years of high double-digit gains. While the market has grown more than 50 percent every year in the past four years, analysts are now expecting growth of around 10 percent to 15 percent in the coming years.
According to GTM Research, leased solar power systems are expected to drop to 45 percent of the market by next year, down from 54 percent this year. That share is expected to fall further to under 30 percent five years from now. SolarCity is still the No. 1 residential installer, holding a market share of around 30 percent, but is now having trouble finding new buyers. In recent quarters, SolarCity has increased the number of sales it makes with cash or loans.
Tesla will also be focusing on improving autonomous driving in 2017. Improving Tesla’s “Autopilot” feature and its suite of advanced driver assistance systems is a priority for the company. Tesla shares are poised to end the year about 13 percent in the red. The broader S&P 500 index has seen a gain of more than 10 percent for the year.