An electric opening for Tesla’s Model 3
In Los Angeles, founder ElonMusk unveils a prototype of $35,000 car
Tesla Motors offered a glimpse of its future Thursday night — it carries five adult pas- sengers, zips from zero to 60 mph in under six seconds and attracts plenty of fans.
The electric vehicle maker rolled out the Model 3 sedan, a $35,000 car designed to bring the Palo Alto company’s luxury electric vehicles to a broader audience.
CEO Elon Musk, onstage in Los Angeles and streaming online, offered a tease of the design and features that had only been shadow and rumor. The base model will travel 215 miles per charge and will come with autopilot software and five-star safety ratings. Design tweaks will allow the four-door sedan to afford passengers more room than comparable vehicles. It comes with front and rear trunks and can fill up at the company’s supercharger
network.
Tesla took in more than 115,000 reservations in 24 hours, Musk said. “We have an amazing product,” he said to cheers. Guests were invited to take test drives after the stage show.
The “people’s car” of Tesla is about half the price of a new Model S and is expected to compete with Audi and BMW sedans.
Ordering priority goes to previous Tesla customers, who may have already spent more than $100,000 on the company’s vehicles.
Federal and state tax credits could reduce the final cost by $10,000 for California owners. However, the $7,500 federal tax credit begins to phase out in the months after the company sells 200,000 vehicles, according to the IRS.
The phaseout reduces the credit to 50 percent in the first six months, then to 25 percent for the final six months before ending. Tesla could surpass the cap in the initial phases of Model 3 deliveries.
At stores around the world Thursday, Tesla lovers reserved their Model 3s in dollars, euros, renminbi, pesos and yen.
But in any currency, they will have to wait. Maybe years.
That’s OK with Tom Heaton, a software developer from San Francisco.
Heaton woke early, drove to the Stanford Shopping Center and claimed the first spot in the Tesla store reservation line at 4:15 a.m. About six hours later, the line stretched to some 400 prospective buyers, waiting in camp chairs, bringing friends, dogs and laptops. Fans turned out in Walnut Creek and Dublin, as well.
Heaton was ready to spend $1,000 to reserve a car that so far is only a prototype. “I have faith,” he said.
The $35,000 sedan is poised to open new markets for the Palo Alto-based electric car company beyond the highest luxury niche. The company also expects to grow from selling 50,000 cars a year to many times that number.
The car is due out in late 2017, although the company slipped on deadlines for the Model S and Model X. Online reservations began Thursday evening.
Musk also laid out a vision of the company’s Nevada Gigafactory and Fremont plant bursting into high production. Musk said it was “very doable” for production levels to reach the manufacturing levels at the former Nummi plant — a half-million vehicles annually.
Many customers cited the new sedan’s price, envi- ronmental friendliness and the automaker’s reputation for quality as the deciding factors to reserve a Model 3. The deposit is also refundable, limiting the risk to customers.
Some analysts expect the sedan to be a turning point for the company to reach consumers beyond a luxury niche. The company received more than 20,000 preorders for the Model X, which required a $5,000 down-payment from customers.
Argus Research and Robert W. Baird analysts upgraded the company’s stock in March. Baird analysts recently toured the Fremont factory and left confident about the company’s manufacturing skills and ability to grow and become more efficient as production begins on the Model 3.
“Importantly,” Baird wrote, “we think initial reservations will exceed expectations.” Tesla stock finished the trading day up 1 percent.
Outside the Tesla Stanford store, customers sipped coffee and ate cookies provided by Starbucks and Tesla.
Jose Ordonez, 45, arrived at the Stanford store from Redwood City three hours before the 10 a.m. opening. He checked a Facebook group where users updated a spreadsheet of customers waiting at stores around the country. The site reported lines of 600 people in Orlando, Florida, 400 deep at stores in Dallas and Austin. In the Bay Area, the site reported about 270 customers in Walnut Creek and 250 in Dublin.
For Ordonez, the ques- tion became should he reserve one or two vehicles. A text from his wife just minutes before he reached checkout clinched the decision. “I went with two,” he said.
The crowd also stretched across generations, from college students to retirees.
Stanford freshman Tevon Strand-Brown, 19, convinced his mother the car would be safe, environmental and not too expensive in the long run. He sent enough materials and background to flesh out a term paper.
“It worked,” he said, and smiled. “I’m surprised.”
Heaton said he was used to product lines. He’s waited for Apple Stores to open for “pretty much every one” of the iPhones.
He slipped into the Tesla store at 10 a.m. sharp, to applause from the staff. In just a few minutes, he was back out the door, smiling. He expected to received a reservation number in his email tonight. “Nice and easy,” he said. Now comes the wait.