Tesla Model 3 makes pitch for mainstream
CEO Musk says itwill be Model T, not Edsel
FREMONT, CALIF. If the gleaming Model 3 rolling out of the Tesla factory here Friday could ask its maker a question, this one would be apt.
“Will I be the next Ford Model T, the spark of a new transportation revolution, or the Ford Edsel, a misfire consigned to the annals of automotive history?”
Tesla CEO Elon Musk is sure of the answer.
“The whole point of Tesla was to build a great affordable electric car,” Musk said at a gathering of employees and a few dozen media for the rollout of the first Model 3 cars. “That’s what this day means. I’m confident it’ll be the best car in its class, gasoline or not, hands down.”
Certainly a lot rides on the Model 3’ s tires. Tesla has become a cultural touchstone because of its fast and expensive $ 69,500- and- up Model S and X electric sedans, but with the $ 35,000 Model 3 it hopes to usher EVs into the mainstream while turbocharging its production numbers to calm investors. Tesla produces around 100,000 vehicles a year, all Model S and X. Now with the Model 3, it hopes to ramp up to 600,000.
Tesla’s stock continues to soar despite questions about profitability, rocketing to $ 334 from $ 235 in the past 12 months. But some analysts aren’t sure Model 3 can be Tesla’s savior.
“The make- or- break part of this for Tesla isn’t the production numbers, it’s the profitability and ownership experience issues,” said Karl Brauer, executive publisher at Autotrader and Kelley Blue Book.
“If one or both are off, it’s big trouble,” he said. “It’s tough to be a company that specializes in EVs, as they’re only 1% of market and most electric cars aren’t profitable for their companies.”
Musk seemed well aware of the challenges ahead, notably an initial factory break- in period. There are around 10,000 parts that make up a Model 3, 70% of which are made in North America. The CEO suggested that suppliers held the key to the Model 3’ s launch.
“It’s an amazing car, but we’re going to go through six months of manufacturing hell first,” he said. “Production will move as fast as the slowest parts ( supplier).”
There’s evidence that the Model 3 should be easier to make, which could mean fewer quality issues that were the bane of Tesla’s first two complex models. The Model 3 features only one central screen in the middle of its dash, compared with two in the S and X. The car is built from steel and aluminum, vs. the more complicated all- aluminum construction of its more expensive siblings. Initial models will not be available with complex four- wheel- drive mechanicals, just rear- wheel- drive. Its door handles are manually operated.
“There’s nothing in that car that doesn’t need to be there,” Musk said. “As we gain confidence with the production rate, we’ll add increasing amounts of complexity.”
Musk was on hand to deliver the first 30 cars to employees, who will serve as guinea pigs for the production team looking to ferret out quality issues.
Whereas many owners of Model S and X sedans likely have other cars, the Model 3 is aimed at a market where repair issues could leave owners stranded. There could be a concern that if owners report problems, those on the wait list could cancel their orders.
Musk is unconcerned. “Have you ever seen an ad for Model 3?” he said. “There are no discounts. If we did anything other than try and put brakes on demand, it would go bananas.”
The Model 3 will initially be offered in two iterations: a $ 35,000 base model with 220 miles of battery range, a 130mph top speed and a zero- to- 60- mph time of 5.6 seconds; and a $ 44,000 version with 310 miles of range, 140- mph top speed and 5.1 seconds to 60 mph.