Tesla Motors Inc. (NASDAQ: TSLA) delivered 24,500 cars in the third quarter, up 70% over the second quarter. It built 25,185, up 37% over the same period. The Tesla numbers are impressive, but not nearly what is needed to hit the company’s goal of 500,000 deliveries in 2018. Its ability to hit that number will be crucial to answering the question of whether Tesla eventually will be a viable company, and whether it can hold off new electric cars that have started to enter the market.
The sharp climb will depend on the new, inexpensive Model 3. Tesla has 370,000 back orders for the Model 3. However, it has not produced a single one.
Among the barriers to reach the 500,000 sales per year is that Tesla needs more money. It is hard to say what the sum will between now and 2018. As Tesla buys SolarCity Corp. (NASDAQ: SCTY), founder Elon Musk admitted his treasury is close to empty.
The other block to Tesla’s goal to reach 500,000 is the opening date for its Gigafactory. Without it, Tesla cannot produce the lithium-ion batteries it needs. Without them, the preorders of the Model 3 become unimportant.
Finally, unless Tesla can keep up its white-hot growth, it faces harsh competition from every major car company in the world, eventually. General Motors Co. (NYSE: GM) is first among these. It has released its Chevy Bolt, which is priced below $40,000. That is the Model 3’s sweet spot.
Tesla has a long way to go to reach its 2018 goal.