Rough year for Tesla

American electric car company Tesla Motors is burning through cash following severe financial losses during 2015, according to full-year financial statements announced by CEO Elon Musk.

Musk was quick to turn attention to the future and claim Tesla will double vehicle deliveries in 2016 to almost 200,000, with the company pushing Model X production up to 1000 per week by the second quarter.

Only 206 Model X SUVs have been delivered since launch in late September.

Musk also confirmed the company will officially pull the covers off its small Model 3 sedan in six weeks. Set your calendar for March 31.

Those waiting to buy the mid-size Tesla sedan, which will be priced well below the $100,000-plus Model S and Model X, will have to be patient. Model 3 production, says Musk, will start in late 2017 — more than 18 months after the reveal.

So far we’ve seen concept renderings and a few full-size foam forms resembling what could be the Model 3, which is said to be 20 per cent smaller and much lighter than the Model S.

Speculation aside, Musk has confirmed the Model 3 will be less expensive with a blue-collar price target about 50 per cent below Model S, or around $US30,000.

Final pricing, though, depends totally on reducing the cost of lithium-ion battery production and supply from Tesla’s new gigafactory now under construction in Reno, Nevada. Tesla Motors claims the gigafactory will begin producing battery cells in 2017, obviously in sync with launch of Model 3.

Styling, price and a realistic driving range beyond 300km will be essential if Tesla’s Model 3 is to remain competitive against Chevrolet’s all-new Bolt, the first model built on GM’s new electric vehicle platform.

Others are sure to jump into the mid-size affordable EV market including Ford, which is believed to be developing a new pure EV with plans to build it in high volumes in Mexico.

With the Model 3 in full production by first quarter 2018 and a new high-performance Roadster in development and possibly ready for production later in 2018, Tesla may be on track to fulfill Musk’s promise to deliver 500,000 vehicles and start making money by 2020.