Tesla Gigafactory, the key to Tesla’s success?

US electric carmaker Tesla Motors (TSLA) is certainly one of the most talked about auto companies. It unveiled its first mass-market electric vehicle, Model 3, on March 31, 2016, at a high-interest event. According to a report published in Fortune, Tesla is set for a grand opening of its Nevada-based Gigafactory on July 29, 2016. The report cited a Tesla email sent to partners and some customers who participated in its Model S referral program.

Tesla Gigafactory Grand Opening: Should Investors Care?

Gigafactory update

Tesla Gigafactory is an ambitious project that could become a game-changer for Tesla. In its 1Q16 shareholder letter, the company revealed that it plans to build half a million cars per year from fiscal 2018. This upped Tesla’s production plan by two years from the original plan for 2020.

The company also stated that it remains on plan to make the first cells at its Gigafactory in 4Q16. It adjusted the plan to accommodate a revised build plan at Gigafactory.

Meanwhile, mainstream automakers (XLY) such as General Motors (GM), Ford (F), and Honda (HMC) are also focusing on the future growth potential of their electric vehicle segments.

Why should investors care?

It’s important for Tesla investors to keep a close eye on Gigafactory developments. The company’s ability to produce a large number of cars per year at a reduced cost depends on it.

During Gigafactory’s grand opening event, investors can expect an announcement on how Tesla plans to advance its operations to match its revised units build plan.

In this series, we’ll see why Tesla’s progress on production and deliveries in fiscal 2016 may drive its stock. First, let’s see why Gigafactory could be very important to ensure the success of Model 3.

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