Tesla (NASDAQ:TSLA) admitted in its 10-K filing from March 1, 2017, that it did not yet have any Model 3 Beta Prototypes completed. In a March 16 conference call, it suggested that some "release candidates" could be driven in as little as one or two weeks thereafter, and on March 24 we got the first video of a Model 3 "release candidate" driving down a street: here.
Whatever Tesla meant by those terms, one thing is clear: It has not yet had a fleet of Model 3 cars to torture-test on public roads. The first "release candidate" car that is capable of being driven just made it out.
On or about March 7, Jaguar Land Rover presented at the annual Geneva Auto Show. This is a video with all or parts of that presentation: here.
Listen carefully to what Jaguar chief designer Ian Callum says after the two-minute mark. He says that There are 200 prototypes of the production version of the Jaguar i-Pace being tested around the world.
So let's be clear here: Tesla, as of the middle of March 2017 didn't have any Model 3 cars yet undergoing torture testing. Jaguar, as of March 7 or so, had 200 i-Pace cars undergoing such testing. That means that under the most generous of definition, Jaguar is at least even with Tesla in terms of bringing a quality product to market. Most likely, months ahead.
Jaguar didn't say for how long it has been testing these 200 cars. Perhaps they started several months ago already? Or perhaps this testing just started shortly before early March of 2017. The point is this: Jaguar could be ahead by more than the minimal one-month or so rounding error at this point.
Remember, Tesla says it will start production of the Model 3 in July 2017. Jaguar hints to first deliveries in June 2018 - for a car that started torture testing before Tesla's car.
Torture-testing a new car is a little bit like gestating a baby. No matter how much money you spend, what technology you use, it still takes a certain amount of time. You can't make a baby in month. It doesn't work that way. Some things simply take time, and some things can't be bought for money. It's in the nature of things.
The idea that Tesla will now do in less than four months what takes Jaguar at least one full year, conceivably two years or more, is simply not credible. Yes, you can deliver a baby early - but it is not wise to do so, if at all avoidable.
The Model 3 looks like a great car. It's not only beautiful, but it seems reasonably practical for a low-slung hatchback-sedan. It will surely be a worthy competitor against not only the Chevrolet (NYSE:GM) Bolt which is available today, but also the 200-plus mile range practical electric cars that will be launched over the next few years from Nissan, Jaguar, Audi, Mercedes, Volvo, Hyundai, Ford (NYSE:F), BMW, Toyota and others.
But if Tesla doesn't take enough time torture-testing a few hundred units of this car first, for a year or two on public roads, that would be a huge risk.
Disclosure: I am/we are short TSLA.
I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.
Additional disclosure: At the time of submitting this article for publication, the author was short TSLA. However, positions can change at any time. The author regularly attends press conferences, new vehicle launches and equivalent, hosted by most major automakers.