Tesla’s Model 3

Last night Tesla introduced its new Model 3 sedan, built for the mass-market.

The Model 3, with a base price of $35,000, is Tesla’s first offering at a price point within range of most American cars. Actually, with federal and state-level tax incentives, the out-the-door price for the car might be below the $33,500 average price of a new US car.

115,000 people have already placed $1,000 reservations for the car, securing $115 million dollars in revenue for the company.

Autopilot will come standard on the Model 3, but the big selling points seem to be the electric (gasoline-free) engine and the general appeal of Tesla.

Big questions remain, including:

  1. When will the car will actually launch?
    The target date is late 2017, but that could slip.
  2. Will Tesla be able to mass-produce mass-market cars?
    Tesla’s Fremont, California, plant has capacity for 500,000 cars per year. But Tesla only built 50,000 cars last year. Ramping up by an order of magnitude may cause problems.
  3. Will other automakers beat Tesla to market?
    The Chevy Bolt, with a similar spec sheet, is slated to launch in late 2016.
  4. Will the Model 3 be able to maintain its $35,000 price target?
    The Model S pricing jumped somewhat from where it was announced initially, and the same could happen for the Model 3.

Nonetheless, yesterday was a pretty great day for Tesla Motors.

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