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How The Tesla Investment Case Had To Suddenly Change

A funny thing just happened, after recent reporting around General Motors (GM) and Nissan (NSANY) in particular, the investment case for being long Tesla (TSLA) had to change.

Until the last 30 or so days, the vast majority of the Tesla bull investment case was based on something along these lines:

The Model S and Model X were just the small warm-up party. Volumes may reach 50,000 or potentially as much as 60,000 in 2015, but that will not lead to profitability or positive cash flow. Instead, as Elon pointed out on January 13, profitability will be reached when Tesla delivers 500,000 in 2020.

The reason Tesla will reach 500,000 cars sold in 2020 is because of the Model 3. It will be the first electric car in the $30,000 - $40,000 price range to hit 200 miles of range and still be a practical family car. Competition will eventually