Elon Musk: Tesla Model 3 sedan will begin production “in about two years”

In an announcement made last week, electric vehicle maker Tesla Motors' CEO Elon Musk said that the production of the mass-market Model 3 sedan will likely commence "in about two years."

The cost of the Tesla Model 3 sedan will be approximately $US35,000 before tax credits. However, the details about the Model 3, as of now, are rather scarce. Nonetheless, it would be worthwhile to note that the range of Tesla's Model S luxury sedan is above 322km.

The Model 3 sedan is one of the key components of Tesla's targeted sales figure of 500,000 cars in the year 2025. The sales target set by Tesla is noteworthy, especially against the backdrop of the fact that the company has sold only about 55,000 electric vehicles this year.

If Tesla is able to start Model 3 sedan's production in two years as planned, the new sedan will apparently transition Tesla into a mainstream car manufacturer which is consistent in generating free cash flow.

Despite the fact that competition in the electric-vehicle market is expected to increase sharply in coming years, Tesla stock's valuation reflects that, if the company's plans go smoothly, the company will seemingly have a clear road to travel, towards reaching its sales target of 500,000 units in 2025.