Tesla reveals mass-market Model 3

Tesla reveals mass-market Model 3

By: Alexandria Sage and Joseph White

Hawthorne, California – Tesla has given fans gave a sneak preview of its Model 3 sedan, saying more than 130 000 people have ordered the car, even though it is more than a year away from production.

Tesla chief executive Elon Musk unveiled a prototype of the Model 3 in Hawthorne, California outside Los Angeles to hundreds of Tesla owners and the media, saying the vehicle would go into production in 2017 at a starting price of $35 000 (R517 000).

The Model 3 is critical to Tesla’s growth plans, but will enter a crowded field of luxury and electric cars that includes petrol-powered models such as the Audi A4 and BMW 3 Series, and electrics such as the upcoming Chevrolet Bolt.

‘Electric cars must be exciting’ – Musk

“Do you want to see the car?” teased Musk, to screams from the audience in the hangar-sized facility inside a Tesla design centre. “We don’t have it for you tonight – just kidding!”

Three Model 3s were driven onstage. The compact sleek four-door car with no grille features a roof that is a panoramic pane of glass from front to back.

Musk said that 115 000 pre-orders had already been taken on Thursday alone for the car. Within a half hour, that number reached 137 600 in a rolling scroll projected onto a screen.

Fans had camped out overnight, queueing outside Tesla stores across California to put down deposits on the car in scenes reminiscent of the launch of Apple products.

ECONOMY OF SCALE

The Model 3 is crucial for Tesla to reach its goal of selling 500 000 cars a year by 2020. The success of Tesla’s Gigafactory, its battery factory near completion in Nevada, also depends on the Model 3.

Tesla says economy of scale from the massive facility will cut the cost of its battery pack by 30 percent to enable the lower-priced vehicle.

“The Model 3 is important to the industry,” said Kelley Blue Book’s Jack Nerad, “because it will signal whether Tesla is a major threat to the status quo or just another wannabe car company with a fleeting chance for long-term success,” .

GM is on track to beat Tesla to the market with the Bolt, which it says will be launched late in 2017, offering about 320km of electric driving range and a starting price of around $35 000 (R517 000). A new generation of Nissan’s Leaf is also expected to offer more driving range at a similar price.

The Model 3 and others in the new generation of electric vehicles face challenges from low petrol prices, high battery costs and uncertain investment in recharging infrastructure. Data from the Electric Drive Transportation Association shows sales of electric and hybrid vehicles in the US were down nearly nine percent year-on-year to 60 384 over the first two months of 2016.

By comparison, Ford sold more than 60 000 full-size F-series pickups in February alone.

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