Tesla stocks rose after company announces pausing factory for Model 3 development

Automotive - Mohit Shah - Feb 10,2017

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tesla stocks rose after company announces pausing factory for model 3 development

On Thursday, Tesla stock surged, a day after the firm said it is resting production at its Fremont, California, factory in order to initiate manufacturing of its Model 3 sedan. 

Tesla stocks rose roughly by 2.5 percent during midday trading.

The action is a clear sign that the firm is on track with the expansion on the much-anticipated car, which is slated to go into bulk production later this year.

Tesla representatives said in a statement, the pause was firmly planned, and the company intends to add capacity to the prevailing paint shop so that it is equipped for Model 3 and execute general maintenance on further factory equipment.

The statement further revealed that this move will permit Tesla to start Model 3 sedan production later this year as already planned and empower the firm to start the ramp in the direction of “500,000 vehicles annually in 2018."

The Model 3 will be Tesla's first mid-priced car projected for the mass market with a value of 35,000 without tax rebates. Quite recently, Tesla has tormented some details, such as pictures of design models and information connected to the car's performance.

Analysts have tagged Tesla's production timeline for the car as "aggressive," and some have even guessed that its debut may be postponed at some point.

However, in a research note issued on Thursday, Baird analyst Ben Kallo commented that he expects about 25,000 Model 3 distributions in 2017.

He also added that his confidence in Tesla's timeline has grown after touring the Gigafactory in Nevada.

Earlier this week, Tesla’s Chairman and CEO Elon Musk tweeted about the car not offering the chance to advance to Tesla's longest-range 100 kilowatt-hour battery, which is provided for both the Model S and X. Musk stated that the car will be too small to hold the large battery.