Top 5 Need To Know Facts About the Tesla Model 3
Electric cars were once the stuff of sci-fi, but Tesla Motors is steadily turning them into an affordable reality. Welcome to WatchMojo News, the weekly series from WatchMojo.com where we break down news stories that might be on your radar. In this instalment, we're counting down 5 facts you should know about the Tesla Model 3.
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Script written by Sean Harris
#5: How Is Tesla’s Model 3 Different from Previous Tesla Vehicles?
The Changes
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Model 3 is the fourth electric car released by Tesla, after the Roadster, the Model S and the Model X – with the major difference being its price. With a starting cost of $35,000, it’s available for around half as much as Tesla’s next cheapest car, the Model S. As the company’s first venture into the ‘affordable cars’ market, the Model 3 is arguably one of the most significant car releases in decades, receiving unprecedented press and public attention. Tesla CEO Elon Musk hosted a glamorous launch event in California on March 31st, 2016, with the car expected on the road by late 2017. Post-launch, Musk tweeted that the future of electric cars was looking ‘bright’; CNBC called the unveiling of the Model 3 ‘a watershed moment… for the entire auto industry.’
#4: Why Is This Model Important to Tesla Motors?
The Market
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Until now, Tesla has operated as a luxury car manufacturer, providing a futuristic vehicle for those with enough disposable income. For example, the current Tesla Model S is priced to compete against luxury car brands such as Mercedes and Lexus; more specifically the Mercedes-Benz S class, Lexus LS and the BMW 7 Series. Now, the company is aiming to bring its car of the future to the masses. While there are plenty of cars cheaper than $35,000, and Musk expects the average Model 3 price to reach around $42,000 with add-ons, Teslahas never been as achievable for so many people. It will now be able to directly compete with more popular models, such as the Volkswagen Golf or Toyota Camry. Musk’s goal is to produce 500,000 vehicles a year, and the Model 3 is crucial in achieving that. In 2015, Tesla posted losses of $889 million, and has consistently been operating at a loss since conception, but the hoped is that the Model 3 will inspire profit. A high-volume vehicle, it’s an attempt to establishTesla as a major car company, rather than a niche, tech-heavy start-up.
#3: How Did the Industry and Consumers React?
The Hype
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Commentators have compared the anticipation for the unveiling to that of a smart phone release, with similarities consistently being drawn between Teslaand Apple. Fans queued and camped out for hours outside Tesla dealerships across the US, with some stores in California seeing hundreds lined up outside. The first online pre-orders were taken an hour before the launch, with buyers paying a refundable $1,000 deposit to secure their spot on the Model 3 waiting list, some without even seeing the car beforehand. According to Musk, 180,000 pre-orders were made within the first 24 hours, equating to around $7.5 billion made in a day! Jack Nerad, of Kelley Blue Book, said “Typically, you don’t see pre-sales like that at all… There’s a magic around Elon Musk [and Tesla] that has enthralled a lot of people.”
#2: How Did the Launch Affect Tesla?
The Stocks
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On the morning of April 1st, 2016, Tesla shares had surged 4.5%, gaining over $10 to reach $240.20. By the afternoon, the trading volume of Tesla stock had more than doubled its 30-day average. While some analysts remain skeptical that the company deserves its high valuation, consumer excitement has certainly affected the markets. Elon Musk has given ambitious valuations ofTesla in the past – in February 2015 he predicted it’d rocket to $700 billion – but clamor for the Model 3 has given at least a little ground to his high expectations. Within 2 days of the launch, over 230,000 buyers had reportedly made a deposit, numbers which shocked even Tesla itself; ‘Recommend ordering soon, as wait time is growing rapidly’, tweeted Musk.
#1: What Does This Mean for the Electric Car Industry?
The Future
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The hype surrounding Tesla’s Model 3 proves decisively that people do want electric cars; they’re no longer an outlandish concept, but a cutting edge must-have. For Tesla specifically, the early signs are good, but there are still only refundable deposits to show. There’s no guarantee that every deposit will translate into a full purchase when the cars become available. And, as other established auto companies look to break into the electric car industry as well,Tesla may find themselves ousted out by competition. However, comparisons are often drawn between Tesla and Apple for a reason; Elon Musk seems to have created a brand so synonymous with its sector that its reputation precedes it – why else have thousands paid the blind deposit? As the iPod stood apart from other Mp3 players, Tesla may prove another level of electric car – with the Model 3 as its driving force.
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