Tesla Model 3 unveiling arouses strong interest in an affordable electric vehicle.
Unless you reside under a rock, you’ve probably endured a barrage of news about the Tesla Model 3, the long-awaited and much more affordable electric vehicle from America’s niche automaker.
Upwards of 300,000 advance orders (pre-orders) have already been placed for this five-passenger, all-electric model since it was presented on March 31, far outstripping expectations. To secure an order, customers are required to make a $1,000 refundable deposit for a vehicle that won’t hit the market until late 2017. That type of commitment to a sedan most consumers won’t see for several years attests to the power of the Tesla brand.
Mass-Produced Tesla Model 3
What’s the difference between the Model 3 and Tesla’s two other vehicles, the Model S sedan and the Model X SUV? For starters, this one will be mass-produced and built in quantities designed to transform Tesla Motors from a niche automotive manufacturer to a fully scaled automaker. Although Tesla won’t yet have anything near the model portfolio of General Motors, Toyota or Hyundai, the Model 3 will eventually be produced in large enough numbers to potentially become one of the top selling sedans in the U.S.
Supporting that capability is a new gigafactory, which is currently under construction in Nevada. Built in cooperation with Panasonic and other strategic partners, the factory will begin to supply lithium-ion batteries in 2017, coinciding with the release of the Model 3. When operating at full capacity, Tesla says it will produce 500,000 batteries per year, far outpacing the world’s current production levels.
Another factor working in the Model 3’s favor is the price: this sedan will cost about $35,000 before federal incentives. That’s less than half the cost of any Tesla product to date, essentially bringing high-end vehicle electrification to the masses. It is also priced competitively with the BMW 3 Series, the leading compact luxury model. Two mainstream models, the Nissan Leaf and GM’s upcoming Chevrolet Bolt, are also within range.
When Tesla’s CEO Elon Musk took the wraps off the Model 3, a handsome design was revealed. That is, once your eyes move beyond what appears to be an unfinished grille (The Model 3 doesn’t need a grille, but there is something incomplete about its front fascia.)
Beyond that, the vehicle’s silhouette rivals the BMW 3 Series, Cadillac ATS, Mercedes-Benz C-Class and other models in this segment. Consequently, Tesla has luxury buyers in mind while pricing it within the reach of mainstream buyers.
The showcased prototype was equipped with many features that will hike up the final cost of the Model 3, perhaps topping $50,000 when all is said and done. The model shown included upgraded wheels, which are likely to add $2,000 to the car’s cost. The prototype was also covered in premium paint, featured an extra-cost glass roof and was outfitted with a premium interior. Further, other features such as available all-wheel drive and a larger battery to extend vehicle range will also elevate the price.
Wrapped in Mystery
Some questions about the vehicle’s interior remain unanswered. Tesla provided a glimpse of the cabin with some critics expressing dissatisfaction with the lack of a proper dashboard, a drab steering wheel and other features some felt were simply underwhelming.
In true Elon Musk fashion, the CEO responded to such concerns by taking to Twitter, noting that a follow up reveal would focus more on the interior. He also remarked that the sedan’s real steering system would be shown later, explaining it “feels like a spaceship.”
The Competition Speaks
The Model 3’s unveiling and subsequent pre-orders haven’t gone unnoticed by the Model 3’s chief competitors.
In fact, Autoblog may have tapped a certain “angst” felt by GM as it prepares its own mass-produced, all-electric Chevrolet Bolt, particularly when a spokesman was queried about its own pre-order status. Chevrolet spokesman Fred Ligouri said, “We haven’t taken any. We don’t need to begin building our products. We’re really excited to offer it when it goes into retail production at the end of this year to those that have expressed interest and we’ll work through our great network of dealerships to get them to customers.”
The Chevrolet Bolt, set to hit the market about a year in advance of the Tesla Model 3, will be priced slightly higher ($37,500) and offer about 200 miles of range compared with the 215-mile range for the Model 3. This is where GM may have some trouble competing with Tesla, a brand more in line with Cadillac than with Chevrolet. We’ll have to wait to discover just how spartan the base Model 3 is. It may turn out that a mainstream Chevrolet Bolt is better equipped than an upmarket Tesla Model 3.
Nissan with its Leaf is the other competitor watching Tesla closely. Although the Leaf’s range is half that of its upcoming competitors, the company has a six-year head start on both and a starting price point of about $30,000. Automotive News reports that Nissan CEO Carlos Ghosn called the Model 3 “good competition” and said it would expand the market and stimulate demand for electric vehicles.
Possible Challenges Looming
If there is anything that might thwart Tesla Model 3 sales and overall interest in electric vehicles it is the current low price for gasoline. As long as fuel prices remain low, some consumers simply won’t see a need to purchase one. Another looming concern is tax incentives — only the first 200,000 Tesla owners who qualify for the $7,500 federal tax credit will get one. That threshold may soon be reached as it includes qualified owners of other Tesla models, not just the Model 3. For this reason, Tesla is marketing the Model 3 for a base $35,000 cost, a price that doesn’t factor in state and federal incentives.
In all, the Model 3 and consumer interest in the same demonstrates Tesla’s strength in the United States as well as around the world. Certainly, hype has helped focus extraordinary attention on the Model 3, which may prove to be the most disruptive model yet from Tesla Motors.