As the market leader in the electric vehicles segment, Tesla Motors (TSLA, Financial), is out to mass-market the Model 3 in 2016 and start delivering it to customers in 2017, its CEO has mentioned about the vehicle at the Reddit AMA held this Monday, January 5. He has confirmed that Model 3 will be different from other cars in response to a query asking if he could share some details on this mass-market vehicle. Let’s quickly get into what has been conveyed from the horse’s mouth and how Tesla is placed in the competitive map after the Model 3 launch. So, here’s the total story.
Having apparent variance from the existing range
Last July, the Palo-Alto based EV maker confirmed its plans to launch the Model 3 for the common masses. It was shared that this model would weigh 20% lesser than the existing Model S and would have a range of over 200 miles. Also, as per estimates provided from Tesla’s counter, this model is being priced reasonably lower than the starting price of Model S in order to make it highly appealing to the common man. The starting price range for the Model 3 is likely to be set between $30,000 and $40,000, almost half of that of Model S. Such an economical price tag has been possible as the Gigafactory is about to get operational which would aid in advocating cheaper battery technology.
However, the management have made it absolutely clear that this EV is not a cut-down version of the Model S or Model X crossover, which is scheduled to be launched by the last quarter of the year. The company has already highlighted in the earnings conference last November that the all-wheel drive (AWD) “D” version of Model S is the precursor technology to the upcoming Model 3.
In fact, this new EV would be based on a completely new platform as conveyed by Mr Musk.
In the face of competition
The latest survey by DMV.com suggests that Tesla needs to do a lot of things to ensure the success of its Model 3. In order to succeed Tesla Motors needs to address the price, range, charging stations and have to educate consumers about its electric vehicles. Many consumers are usually hesitant because of the pricey tag but with regulations becoming stricter, things might see a U-turn soon.
Also, the chief competitors could be GM (GM, Financial), Ford (F, Financial) or BMW (BAMXY, Financial) which are also planning to launch similar vehicles in that timeline. As General Motors, Ford and BMW are looking forward to add more mass-oriented EVs to their range, Tesla might have to face the rivalry heat and will have to surpass its rivals in terms of top line growth.
In fact, last October Musk had exclusively revealed to Auto Express that the Model 3 would contend with the BMW 3 Series and would emerge as the winner.
In the words of Musk …
Musk did confirm that with the strong performance expected from Model 3 after its formal launch it is expected that people could fall in love with Model 3 and look forward to driving it. He believes that the launch of Model 3 would propel sales well into six figures by the end of the decade. As analysts remain optimistic on Model 3 breaking into the compact EV market and making a huge success, only time will foretell what’s actually in store for Tesla. Let’s keep an eye on further news on Model 3 which might be enlightening and could provide better information on Tesla’s near future.
