Tesla Model 3: Has Elon Musk Tapped the Mass Market?
It has been a busy week for Tesla: they’ve launched their most affordable car to date; they’ve completed a pun four years in the making (the initials of the last three models spell out “S3X”); and they’ve made an incredible statement of intent to the international automotive industry. Perhaps more importantly, regardless of whether Tesla succeeds or fails with this model, it is a watershed moment in the future of electric vehicles.
Last year the top selling car in the UK was the Ford Fiesta, selling 133,434 units; the new Tesla Model 3 has received over 270,000 global pre-orders in just two days, raising $270m for the company in the process. This is despite the fact the car will not even be released until the end of 2017. Previously, electric cars existed as an incredibly niche area of the market, representing only 1% of cars sold in the U.S. per year, but these figures suggest, once this technology is affordable, there is a much greater desire than could’ve possibly be expected.
This isn’t simply about a car; it’s about a brand, and the tone of this launch could easily be compared with any of Apple’s major announcements. Like Apple, it is a company whose central motivation is technological progress, and this has, time and again, revealed the potential of electric vehicles to car manufacturers across the globe. They have fostered competition where previously there was little to none and uncovered (or created) a real public desire for electric vehicles, bringing the industry ever closer to becoming profitable. It may be early days - Tesla is still yet to turn a profit – but with almost $10bn worth of sales already in the pipeline, the prospect is looking brighter than anyone could have possibly imagined.
Tesla’s founder and CEO, Elon Musk has always claimed the ultimate aim of the company is to produce an electric vehicle for the mass market, and this car may well meet that goal. Model 3 starts at $35,000 (£24,000), less than half the price of their previous models, and this isn’t taking into account government incentives that could lower the price further. While this price may be somewhat higher than the average car price, it certainly places the car in competition with a sizeable proportion of the market. At the car’s launch on April 1st Musk claimed “you will not be able to buy a better car for $35,000.”
This again is emblematic of Musk’s desire to revolutionise the market and provide a cohesive infrastructure to support it. This comes in the form of an increase of global Supercharging stations to 7,200, allowing users access to superfast charging capabilities no matter where they are and further putting pressure on other manufacturers and governments to follow suit.
Clearly, competitors have already sprung into action with the release and planned release of a multitude of models by numerous manufacturers: from the Nissan Leaf, which is already on the market, to General Motor’s Bolt, due for release later this year. It would appear, there is set to be a huge change in consumer trends, and this may have an incredible impact on the way we use our cars.
The U.K. market was the eighth biggest purchaser of electric vehicles in 2015 and this is reflected in the increase of charging points, which has risen from just a few hundred prior to 2011 to over 10,000 today. With the incredible pre-order figures of this car, this may not be enough and many believe there must be a big change in infrastructure to allow for easy parking specifically tailored to this burgeoning market.
When seen in conjunction with the approaching reality of self-driving vehicles, it appears certain the impact of these will dramatically change the relationship between cars, drivers, and the cities and towns they live in. Not only will it be an incredible feat for Tesla to meet the unparalleled demand for the Model 3, but it will represent a pivotal year in the history of this technology and there is the potential for massive changes to global infrastructures.
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