What's going on?

Elon Musk has announced that electric carmaker Tesla�s Model 3, its first mass-market vehicle, has passed regulatory requirements (tweet this) ahead of schedule and that the first batch will be delivered to customers on July 28.

What does this mean?

The Model 3 � at $35,000, considerably cheaper than Tesla�s two existing offerings � represents a big moment for the company. Management and investors are hoping that the production of the car, sales of which are needed to help cover high development costs, will be free from hiccups. With almost 400,000 pre-orders for the Model 3 on Tesla�s books, there is certainly demand for the car. The big question is whether the company can ramp up its production without skimping on the quality of their cars.

Why should I care?

For markets: There�s still a long way to go�

With previous models, Tesla�s production fell behind schedule, leading to question marks over its ability to meet its ambitious production goals this time. This news from Musk is encouraging because it suggests that Tesla is, so far, on target. But ramping up from the 30 cars it expects to produce in July to a monthly run-rate of 20,000 by the end of the year is a big endeavor. Investors will keep a close watch on Tesla�s execution.


The bigger picture: Tesla has been the epitome of a �growth� stock so far this year.

Stocks exhibiting strong growth (or growth potential) generally performed much better during the first six months of this year than companies that had established but slow-growing operations. Tesla�s stock, up about 70% since the start of the year, is a prime example of investors� appetite for growth. The attitude has reversed somewhat in recent weeks, with established stalwarts like banks performing much better than high growth stocks like Facebook and Amazon. Whether this reversal continues into the second half of 2017 is a big question for investors.