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Tesla Model 3: Highly anticipated affordable vehicle, likely to see off competition
The enormous success and media interest that Tesla’s previous models have had and the influence and following of its charismatic engineer CEO, meant that the announcement of the new Model 3 in early April 2016 became very highly anticipated. Its Model S premium Sedan has been a triumph for the company with sales of the vehicle trumping sales of comparable sedans from the world’s great auto makers in many key markets. The next move for Tesla was to develop an affordable mass market vehicle which could make a significant impact in transitioning vehicles away from combustion engines to electric motors, which is it’s primary aim as a company.
Following the announcement the public response was immediate, people lined up outside its branches all over the world waiting to put down a deposit on the vehicle even before they had seen what it looked like or knew anything about it. In the first 24 hours on sale, the vehicle posted over 100,000 deposits and a week after the launch date that figure had hit 325,000 and currently stands at over 400,000 at the time of writing in late April 2016.
To put that in perspective, Tesla sold 50,000 vehicles in the whole of 2015, so a significant ramp up in production will be required in order to meet customer demand. Tesla has called this the most successful product launch of all time, when the figure hit the 325,000 mark this equated to $14bn worth of implied sales and whilst of course not all will be retained at the time of purchase, the initial deposit of $1000 required to secure a Model 3 produced a welcome cash injection to be used to increase capacity.
It is expected that the Model 3 will not be available until late 2017 and in that time competitors will be circling. Nissan is the most prolific producer of electric cars and its Nissan Leaf has been the most successful electric vehicle to date, largely because it is priced more closely to the mass market target price and so affordable for more people. However it is not a competing product for Tesla, simply because features and functionality are eclipsed by Tesla’s claims for the Model 3. GM however does have a product being readied for market which is likely to be able to compete, the Chevrolet Bolt. With features, range and acceleration being comparable and likely to be available to purchase much sooner than the Model 3 this could be the traditional motor industry’s first major challenge to the technological prowess of Tesla.