The Tesla Model 3, potentially not so electrifying
Tesla revealed their fourth car the Model 3 with visions of it bringing revolutionary change to the auto industry. Despite high hopes, the Model 3 will not achieve these envisions because it will not appeal to the mass market and business problems will hinder production and consumer purchase.
Tesla’s CEO Elon Musk revealed their fourth car the Model 3 on March 31 during a large unveiling ceremony in Los Angeles. The Model 3 is a mid-size sedan that runs solely on electricity powered by a lithium-ion battery. With it, Tesla hopes to continue the company’s goal of environment friendly sustainable travel. It includes some of previous Tesla model features such as autopilot capability, supercharging and comfortable seating. Although it might seem futuristic, the Model 3 will be stuck in the past, at least for a while.
Model 3 Specifications
New to the Model 3, the Tesla motors team claims a base 215 miles to the charge and a zero to 60 mph time of under six seconds. Away from performance, it will be Tesla’s cheapest car yet with a base model costing $35,000. Tesla, being highly proud of their work, has made the Model 3 available for pre-order for a $1,000 deposit. Within the first week of being available, the Model 3 received over 300,000 pre-orders.
Musk said during the unveiling ceremony, “You will not be able to buy a better car for $35,000 — or even close — even if you get no options.”
Being electric, the issue of charging should not be forgotten. The supercharging station network is expanding at a great pace, however while the Model 3 includes the supercharging ability, Tesla motors have not decided on whether it will be free with the purchase of the car. Free supercharging is an expectation by Tesla customers as it has been offered with the previous models and if not given again it could put Tesla in a rough spot for the future.
Steve Hanley said on Gas2, “So if you placed your reservation for a Model 3 thinking that the base price of $35,000 includes unlimited free charging at Tesla’s network of Supercharger locations, you may be disappointed.”
Difficulties in Production
While over 300,000 pre-orders is impressive for Tesla, production and distribution of the car is what it comes down to and this could be problematic for the company. Tesla announced at the reveal that projected initial distribution will take early as next year 2017 as Tesla hopes to increase production to 500,000 Model 3’s when the factory is at full capacity. However this claim seems far-fetched and would take a serious amount of effort and detailed planning to achieve it.
Musk admitted on Twitter, “Definitely going to need to rethink production planning.”
Tesla’s track-record does not provide strong customer assurance as Model X distribution seriously lagged behind last quarter with Tesla only being able to produce 2,400 of the promised 7,000 cars. Tesla has just opened their lithium ion battery Gigafactory, but will not be fully operational until 2020 putting yet another hindrance on Model 3 production for now.
“The big question is whether Tesla will be able to keep up once it comes time to fill all those orders,” Paul Eisenstein said from The Drive. “Production is set to begin sometime late next year, according to founder and CEO Elon Musk, but based on the battery-carmaker’s record, it could be quite some time before it actually gets those orders filled.”
The Market
While achieving performance desires, the Model 3 does not meet market desires. Released in 2012, the Model S was sold during an optimal time as the market moved away from the SUV and toward sedans. Against predictions however, the SUV returned with great enthusiasm and again Tesla released their Model X in good time. Tesla was reading the market well, but has now made a mistake with the Model 3. The market is still favoring the SUV and while even a crossover or compact SUV would have met desires, the Model 3 is for the most part unnecessary.
Matthew DeBord explained on businessinsider.com, “Given the state of the US market especially — and for now, the US is largely where Tesla’s sales are concentrated — it might have made more sense to skip the midsize sedan version of the 3 and roll out a compact SUV as the mass-market product.”
Tesla also faces the simple fact that the Model 3 is electric. To the sustainable techy younger generations an electric car seems futuristic and revolutionary, as it is however, to the majority of Americans a history of the big powerful pony cars, hemis and oil dripping hot rods is something not easily forgotten. All car owners live for the tiny explosions within the motor and the roar from the exhaust but the Model 3 takes this away with over complicated technology.
Explained on The Week, “Shifting sales from the tech savvy crowd to ‘regular folks’ will be quite an effort and winning over enthusiasts already sold on the technology is ‘fundamentally different’ to convincing more mainstream consumers.”