What are the implications of the launch of the Tesla Model 3?
The launch of the Tesla Model 3, the company’s first car aimed at mid-range buyers, starting at $35,000, has prompted more than a quarter of a million people to put down $1,000 to order the US-made electric-powered car. Indications suggest the company has seriously underestimated demand by up to four times, leading to long queues outside Tesla’s stores, a scenario that has to be a first in the car industry.
For a company that until now has been highly exclusive, what does all this mean? To put things in context, the top-selling brand in a country like Spain is Volkswagen, which last year shifted 88,000 units. The top-selling car sold 35,000 units. For Tesla, more than a quarter of a million people are prepared to put down a thousand dollars for a car they won’t be able to drive until at least the end of 2017 will bring in much-needed liquidity, although the experts say producing all those cars will require more financing.
The reason people are prepared to wait for their Tesla, rather than going out and buying a 3-series BMW or a Nissan Leaf is that they have read that it provides a great driving experience and is extremely well-built.
The Tesla Model 3 is a four-door saloon car that seats five adults comfortably, has impressive acceleration, can cover 350 kilometers before it needs a recharge, which can be done for free at one of the company’s many points in the United States and much of Europe (but not Spain), that it is very safe, and comes with self-driving features. All Tesla vehicles feed driving info into a database that is used to continuously improve self-driving, ready for the day when such vehicles will be allowed to circulate on the roads, a move that will likely usher in a ban on non-self driving vehicles, at least according to Elon Musk.
In an impromptu question and answer session via Twitter, Musk said that the Tesla Model 3 that finally hits the road will not be exactly the same as the vehicle at the launch. The interior will be significantly redesigned following criticisms it was too Spartan, with its small screen in the middle of the dashboard, with Musk himself describing the experience aboard as akin to navigating a spaceship. That said, the idea of the car is for passengers to sit back and enjoy the ride. The Tesla Model 3 is not meant to be “driven” as such.
The appearance of the Tesla Model 3 could significantly add to the pool of cars with more and more self-driving features; Musk has probably calculated that more carmakers will add such options by the time the Model 3 comes out, and certainly by 2020, when self-driving cars are expected to be on our roads. At the same time, the launch of the new Tesla will give a significant boost to the electric-powered vehicle market, perhaps even triggering a new oil crisis.
Either scenario would contribute to lower pollution levels and fewer road deaths. Given the price of a new Tesla, it would be a case of early adopters and aspirational consumers leading the way, followed by a second wave of customers who saw the sense in electric-powered self-driving cars, as well as car hire companies and company fleets, along with the shared car market. And all this without taking into account what other car makers are likely to do in response to the fast-changing environment around them.
Tesla has achieved its goals: it is now a trend setter, and following to the letter the strategy it set out. Make no mistake, the launch of the Tesla Model 3 is a milestone in the history of the motor industry.
(En español, aquí)
