At a highly anticipated event on March 31, Tesla finally unveiled an appealing mass market electric Model 3 sedan which the company had previously announced will cost customers only $35,000
By Justin Wunsch at April 1, 2016 12:37 pm EST
The wait for die-hard Tesla Motors Inc (NASDAQ:TSLA) fans is finally over. The fledgling electric car maker’s first mid-priced electric sedan – the Model 3 – was given a peak at to fans by Tesla at its Hawthorne design studio in California on March 31, following enormous lines of people willing to book the vehicle in advance at Tesla sales stores across the country through the day.
The Model 3 emerged on to stage from behind a cloud of lavish smoke and lights that revealed a rather compact but classy four door sedan bound to appeal to car enthusiasts, analysts claim. The company’s CEO Elon Musk vows the vehicle will seat five people including the driver and will pack on a range of at least 215 miles on a full charge. The newest vehicle will also be fully compatible with Tesla’s superior supercharger infra-structure rapidly being deployed across the country.
The Model 3 – perhaps the first of many mass market vehicles for Tesla – is the company’s trump card as it transitions into a mainstream, high volume automaker. Tesla has been eyeing a delivery target of more than half a million electric vehicle sales across the globe by the end of the decade.
With its premium vehicles – the Model S and the Model X – starting at well over $70,000, it is unlikely that the company will be able to achieve its goals majorly on the back of these upscale models alone. The Model 3 in comparison will cost only $35,000 before federal and state level tax incentives. According to a report from Bloomberg, the federal tax incentive of $7,500 and state level tax benefits in some states could bring down the cost of the Model 3 to $25,000. Not bad, critics would say, given Tesla said (and proved via test drives at the event) the Model 3 can still cover a distance of zero to 60 miles in an impressive six seconds.
Some critical analysts had said the discounted price of the Model 3 would likely come at heavily compromised performance. While still several tiers below the performance profiles of the Model S and the Model X, it is still speedy enough to represent a Tesla, analysts say.
More importantly, initial interest in the new Tesla vehicle has helped restore positive commentary for Tesla on Wall Street. Several media publications noted impressive lines of people wanting to book a Model 3 more than a year in advance outside Tesla stores all day. A bookings counter in the background of the Model 3 unveil event (held later in the day) hit 115,000 when the vehicle was revealed, and reached 137,760 by the time the event ended.
Before the event itself, Global Equities Research analyst Trip Chowdry said even 100,000 initial orders for Tesla, could lead to more than $3.5 billion in cash inflows for Tesla. The Model 3 is set to hit American roads starting latter half of next year.