Electrified vehicle manufacturing
198,000 customers plunk down $1,000 deposits for Tesla Model three electrified car
By Dee-Ann Durbin and Justin Pritchard, The Associated Press
Posted: 04/01/16, Three:29 PM PDT | Updated: on 04/01/2016
Request for Tesla Motors’ fresh lower-priced electrical car astonished even the company’s CEO Friday as 198,000 people plunked down $1,000 deposits to reserve their vehicles.
“Certainly going to need to rethink production planning,” a astonished CEO Elon Musk said on his Twitter feed.
Musk unveiled the car Thursday night at his design studio in Hawthorne. It starts at $35,000 and has a range of two hundred fifteen miles per charge, which is far more than most people drive each day.
The orders came from across the world even however the car isn’t scheduled for sale until late in 2017. But they could jeopardize a $7,500 U.S. electrified car tax credit that many buyers are counting on to reduce the price. The tax credits little by little phase out after a company hits 200,000 in U.S. sales.
A Tesla spokeswoman wouldn’t say how many of the 198,000 orders came from the U.S.
Thursday night, Musk said Tesla had 115,000 orders since the company began taking them earlier in the day in Australia. There were long lines at Tesla stores from Pasadena to Hong Kong reminiscent of crowds at Apple stores for early models of the iPhone. But the number kept rising into Friday.
“Thought it would slow way down today, but Model three order count is now at 198k,” Musk tweeted during the afternoon, telling the wait time for the car is “growing rapidly.”
The Model three is less than half the cost of Tesla’s previous models, and its range is about dual what drivers get from current competitors in its price range, such as the Nissan Leaf and BMW i3.
On Twitter, Musk estimated that the average selling price of a Model three with options would be about $42,000. So the sales would bring more than $8.Trio billion in revenue to Tesla.
Prototypes looked like a shorter version of Tesla’s Model S sedan. The Model three has a panoramic glass roof and an elongated fetish mask. Inwards, it seats five and has the same large touchscreen dashboard as other Teslas. It also has Tesla’s suite of semi-autonomous driving features, including automatic lane switching and lane keeping. Musk said it will accelerate from zero to sixty in less than six seconds.
Tesla has a history of missing deadlines for its vehicles to hit the market, but Musk said Thursday that he feels “fairly certain” that the Model three will come out next year.
The lower-priced car is the most serious test yet of 13-year-old Tesla’s capability to go from niche player to a full-fledged automaker. It could be the car that ultimately makes electrics mainstream — or consumers could proceed to be skeptical that electrics will work for everyday use. In the U.S., they still make up less than one percent of annual sales. Either way, the Model three is already switching the industry, spurring competitors to speed development of electrified cars.
General Motors Co. is set to commence selling the Chevrolet Bolt electrified car at the end of this year with a similar price tag and a 200-mile range. Hyundai’s Ioniq, which has a 110-mile electrified range and could match Tesla on price, goes on sale this fall. Audi will go after with an electrified SUV in 2018.
The orders display there’s real, underlying request for reasonably priced electrified cars with high range, says Edmunds.com senior analyst Jessica Caldwell. Customers put down $1,000 knowing that they’ll very likely have to wait two years to get their cars, leading Caldwell to believe it’s more about the cultural phenomenon of Tesla.
“You’re not observing people wait in long lines to purchase a Chevy Bolt, considering it comes out much sooner and the range is about the same,” she said.
During his Thursday night presentation, Musk gave details on how electrical cars can fit into people’s lives, she said. “You felt like the lifestyle was attainable in his talk,” she said.
Musk said Tesla will expand its stores and its fast-charging Supercharger stations globally to support the Model Three. He said the company plans to dual its stores worldwide to four hundred forty one by the end of 2017, and it will dual its Superchargers to 7,200. Tesla also will add thousands of its so-called destination charging stations at hotels and other locations.
Right now, Tesla sells two vehicles: The Model S sedan, which starts at $71,000, and the Model X SUV, which starts at about $80,000. But a lower-priced car was Musk’s longtime aim.
Tesla lowered the cost of the car, in part, by making cheaper batteries. The company previously assembled its battery packs with cells made in Japan by Panasonic Corp. But Tesla and Panasonic are building a massive, $Five billion factory in Nevada to supply batteries for the Model Trio. Tesla says the scale of the factory will lower the cost of its battery packs by thirty percent.
The Model three puts Tesla within reach of millions more customers. Last year, only Two.1 percent of fresh cars purchased in the U.S. cost $75,000 or more, but thirty five percent — or Five.Five million — cost $35,000 or more, according to TrueCar. The Model three is a critical part of the money-losing automaker’s plan to increase sales from around 85,000 this year to 500,000 by 2020.
Dee-Ann Durbin reported from Detroit, where auto writer Tom Krisher contributed.