Tesla founder Elon Musk, according to The Wall Street Journal, has “a secret master plan” to popularize vehicles with no tailpipe emissions. While this hardly qualifies as a secret, Tesla took a major step forward on March 31, with the unveiling of plans to bring a more affordable high-tech vehicle “to the masses.”
Tesla’s Model 3, which won’t ship for at least 18 months, will initially come as a sedan that seats five passengers, travels 215 miles on a charge, and has a starting price of $35,000.
Source: teslamotors.com. (Editor’s note: This is a prototype only. Model 3 features and ordering information may be found at https://www.teslamotors.com/model3.)
The formal announcement was staged as a major event, coincident with a detailed plan for customer preorders. Said Tesla one week later (April 7, 2016) in a blog post titled, “The Week that Electric Vehicles Went Mainstream”:
“A week ago, we started taking reservations for Model 3, and the excitement has been incredible. We’ve now received more than 325,000 reservations, which corresponds to about $14 billion in implied future sales, making this the single biggest one-week launch of any product ever. This interest has spread completely organically.
Unlike other major product launches, we haven’t advertised or paid for any endorsements. Instead, this has been a true grassroots effort driven by the passion of the Tesla team that’s worked so hard to get to this point and our current and future customers who believe so strongly in what we are trying to achieve. Most importantly, we are all taking a huge step towards a better future by accelerating the transition to sustainable transportation.
We want to thank everyone who has shown their faith in Tesla and the mission of electric vehicles. We would write more, but we need to get back to increasing our Model 3 production plans!”
The latest parlor game for analysts is predicting how high Model 3 preorders will go before the car is actually delivered—this for an automobile that is essentially being ordered sight unseen. Forbes reported on remarks by Tesla vice president Diarmuid O’Connell at a conference last week, who said the Model 3 is “the car the company was really set up to build. It has exceeded all of our expectations as far as the rate at which we received reservations. Something approaching 400,000 people have already put down up to $1,000 dollars to reserve this car.”
To put some of the estimates in perspective, analytical firm Statista compared the initial Model 3 preorder projections to the cumulative sales of prior models (which all carry a much heftier price tag).
TESLA’S MODEL 3 PREORDERS IN PERSPECTIVE
Tesla’s cumulative Model S/X deliveries since 2012 compared to Model 3 preorders
Says Statista, “The question that remains is how quickly Tesla can meet the unexpectedly high demand for the Model 3. Deliveries are expected to start in late 2017 at the earliest, and Tesla has yet to prove it can ramp up production at this scale.”
Wall Street apparently looked past that detail over the past two months, with Tesla’s (TSLA) stock gaining about 90% from February 2016 lows to April highs shortly after the Model 3 announcement.
TESLA STOCK PRICES (11/2015–4/2016)
Lest anyone worry that Tesla is going too far “down-market” (and risks becoming the next Saturn, as one critic suggested), the company’s Model X P90D luxury SUV should forever repudiate that notion. Dan Neil of The Wall Street Journal gave the vehicle a glowing review after an extended test drive, extolling the “simultaneously unnecessary and absolutely vital” Falcon Wing doors, panoramic windshield, and the capability to impress the sidewalk crowd at “Nobu in West Hollywood.” With top-end options, this vehicle delivers 532 horsepower and carries a price tag around $135,000.
Source: teslamotors.com (Model X)
