Last month, we reported that top Tesla analyst and one-time ‘Tesla Cheerleader‘ Adam Jonas from Morgan Stanley believes the Model 3 will be over a year late. Today, he released a new note explaining his belief in more detail and how it plays into his vision of Tesla using the vehicle program to finance its “bigger mission to accelerate the development of a highly safe and efficient transport utility.”

In the new note, titled “Tesla’s Mission 2017: Funding the Model 3,” Jonas reiterates an ‘Equal-weight’ stock rating with a price target of $242.00 per share.

He wrote:

“2017 is the year of the Model 3. What’s the content? Where are the prototypes? When do we get to drive it? Will we want one? Is it as good (or better) than the Model S for less than 1⁄2 the price? When does it launch? We may not get the answers to all of these questions in 2017, but we’ll have to get some. And each one matters.”

Fair questions, which he tries to answer in parts later in the note:

“We do not expect the Model 3 to be launched in 2017. While we cannot rule it out, we do not adopt as our base case a scenario in which Model 3 deliveries begin in 2017. We recognize that Tesla management has targeted a 2H launch date and that they will make every effort to satisfy high levels of preliminary demand and fill orders for the product as soon as possible. However, our base case is for a launch in late 2018. We have taken this conservative approach to allow for the probability that Tesla will choose to prioritize the quality, cost, performance and lifesaving technology of the vehicle. While Tesla still adopts a high level of vertical integration, we expect the Model 3 to rely even more extensively on 3rd party suppliers than the Model S, potentially increasing the scope of supply-related factors outside of the company’s control.”

He added that Tesla could use the Model 3 launch to raise more capital, but he didn’t factor it into his model:

“Safety and sheer human driving pleasure are the two key attributes (in that order) that we expect Tesla to showcase with the Model 3, regardless of when it is launched. Elon Musk stated on the 3Q call that it did not need to raise capital (but he did not categorically rule it out). We have not modeled in a capital raise, but gross cash in our earnings model does dip below $1bn by the end of 2018. We only point out that the Model 3 is so important to this company’s future on multiple levels that they really have to get it right. One could reasonably expect Tesla to emphasize to the investment community the opportunity it has to accelerate the launch of what could be the world’s safest automobile and one that represents a potential step-change in real-world machine learning (and the subsequent social and economic benefits). We see ‘teasing’ the Model 3 launch as going hand and hand with efficiently funding the strategy. These two 2017 drivers appear to be inextricably linked.”

As for the current quarter, Jonas expects it to be in line with the results from the last quarter:

“We expect 4Q results to broadly resemble 3Q in many ways. We are anticipating strong growth and potentially positive cash flow from operations (before capex) to be accompanied by great investor uncertainty around the quality and sustainability of the performance.”

Adam Jonas is ranked #681 out of 4,274 analysts on Tip Ranks with a 46% success rate and an average return of 6.3%. Here’s his track record on Tesla’s stock:

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