Mar 312016
 
The now revealed Tesla Model 3.

The now revealed Tesla Model 3.

The eagerly awaited Tesla Model 3 was announced by Elon Musk on Thursday evening.  There were few surprises (after a steady stream of leaks and good guesses over the last month or two), and the surprises which were present were generally of the good kind.

Perhaps the biggest surprise was that the car has already been pre-ordered by 115,000 people.  Pre-orders could be placed from 10am Thursday morning, and in the 10.5 hours between then and when the details were announced, 115,000 people all paid $1,000 deposits to get their name on the waiting list, even though the car had not been announced.  These orders were totally sight unseen, with no details confirmed.

The excitement was akin to the ‘good old days’ of Apple iPhone product launches, with people camped out overnight so as to be near the head of the lines at Tesla sales locations around the world.

Our guess – after the details were released, many more people will be rushing to reserve their cars, too.  The first cars are expected to start being delivered from the end of 2017, and while Tesla talks about annual production growing to half a million cars a year, that is a ten-fold increase on their current rate of new car production (50,580 produced last year), and so we hesitate to expect an immediate production rate at that level.

In other words, we expect the 115,000 cars already reserved represent all deliveries perhaps through mid 2018 – and that is assuming no delays in the start of deliveries.  Tesla has a bad record of delivering new model vehicles on time, so that’s a bit of a risky assumption to make, and with many of the details of the vehicle not being announced at this event (presumably because they have not yet been locked down) we have to wonder just how achievable the late 2017 release date actually is.

Updatewithin 30 minutes of the official announcement, orders had increased to over 125,000.

UpdateBy Friday morning, orders were over 180,000.  Most analysts had been predicting total orders of 110,000 but not until the end of this year.  This is a massive response, way beyond anyone’s expectations.

UpdateAfter 24 hours, 198,000 cars have been pre-ordered.

Updateat 7.26pm on Friday, Elon Musk tweeted that they now have received 232,000 pre-orders.

So, what are people getting?

Facts and Figures

The car in its base model will cost $35,000 (probably plus a gratuitous ‘destination charge’ of perhaps another $1000).  This will, at least for a while, qualify for the government $7,500 rebate, reducing the car’s net cost down to $27,500 (plus destination charge, taxes, license fees, options, etc).

This compares with the entry level Model S (70) which lists for $70,000 in its base configuration.  (Note that the $7500 federal rebate will soon be tapering off – it only applies to the first 200,000 electric vehicles sold by a manufacturer, and Tesla is expected to pass that point in 2018, shortly after the Model 3 goes on sale.)

The car will come with a 215 mile range in its standard configuration, with broad hints suggesting that longer range models will also be available.  The entry level Model S (70) has a 230 mile range, the longest range S90 has a 288 mile range.

It will do 0-60 in under six seconds, and again some hints are suggesting that there may be faster model options.  The entry level Model S (70) has a 5.5 second time to 60 mph; the fastest P90D can reach 60 mph in an astonishing 2.9 seconds.

Not stated, but implied by the graphics shown at the launch event, it will probably have dual motors – one each for front and rear wheels.  It has become standard ‘best practice’ to have dual motors, not so much for the extra power and traction control they offer, but also for the ability to recover more of the energy when braking, giving the car longer range.  This is a $5,000 option on the Model S.

The cars will have Tesla’s controversial ‘auto-pilot’ feature included at no extra cost – this was unexpected.  It is a $2,500 option on the Model S.

On the other hand, Tesla has revealed they are projecting an average selling price per car, after some options have been included, of $42,000.  It is not known what they expect to be selling as upgrades, but probably improved cabin interiors (leather, better seating), different wheels, some additional electronics and cold-weather features, faster acceleration and larger battery packs.

So in general terms, the car will perform similarly to the Model S70 and cost less than half as much.  It will be a bit smaller, but is claimed it can seat five adults comfortably, and like the Model S, will have both front and rear trunks.  Its roof is a single solid sheet of glass, making for an open airy feel, and being much thinner than a traditional roof and headliner.  The car looks appealing and attractive, with clean and flowing but modern lines that aren’t garish or ugly like some of the other electric vehicles have chosen to adopt.

Instead of a portrait mode 17″ screen, it has a 15″ landscape mode control screen.  And Tesla says it will qualify for highest safety ratings under every category that is evaluated.

Some interesting statistics were also quoted – when Tesla does get to start churning out 500,000 cars a year, that would require the entire world’s Li-ion battery production, hence the reason for developing their own Gigafactory  near Reno, NV.  The Gigafactory willl produce more batteries than the rest of the world’s production in total, so it should be capable of supplying batteries for most of the new cars Tesla plans to produce, while also giving them the economies of scale to bring down the cost of batteries to help make their cars more affordable.

In preparation for the deluge of Model 3 cars, Tesla will double its sales and service location from 215 at present to 441 by the end of next year, and will double its supercharger locations (worldwide) from 3,600 to 7,200, and its associate network of ‘destination chargers’ will quadruple from about 3,600 to 15,000, also by the end of next year.

More information about the Model 3 will be announced closer to its release, but there were three operating cars on display at the launch event, and attendees were being allowed a chance to take operating sample cars for brief test drives after the event.

The Model 3 is Not Innovative Nor Game-Changing

This is all very exciting and very positive, but – lines of people and massive pre-orders already received, notwithstanding – the Model 3 is not the game-changing innovator that the Model S was.  General Motors, no less, will be releasing a similar vehicle, with the rather plodding name of the Bolt – later this year, a year before the Model 3 comes out.  It will be similarly priced, similarly sized, and have similar range.  Yes, instead of innovating, Tesla is following a year behind stodgy old General Motors!

A new Nissan Leaf is expected sometime between now and the Model 3 release that will probably have similar specifications to the Bolt and the Model 3, and many other cars are expected out in the next few years too, all with a list price in the $35,000 region and all offering slightly over 200 miles range.  It seems that 200 mile is the turning point where people stop worrying about the range of their electric vehicle, so all new electric vehicles are aiming to meet/exceed that capability.

Certainly the Tesla Model 3 might become one of the best examples of this car category, but it is neither the first car to fit within the category, nor is it expected to be unique in any notable way.

Should You Pre-Order One, Too

Should you rush out and pre-order a Model 3?  It is a lovely car, for sure, and if it were possible to go out and buy one today, then we’d be as keen to do so as anyone else.  But what we’ve been given a not-very-detailed preview of on Thursday is not available today.  None of us, if ordering it now, are likely to get the car in less than two years, and probably more like 2.5 years, and that’s a very long time to wait, and a long time in a marketplace that is rapidly evolving and transforming.  Is its ‘state of the art’ features, as revealed this week, still going to seem amazing and modern in 2.5 years time?

The good news is that with 125,000 or more cars already pre-ordered, you’ll not be getting one of the first off the production line, and hopefully by the time yours would be scheduled for manufacture and delivery, some of the inevitable issues that will arise may have already been identified and resolved.  The Model S has undergone a lot of tweaks and improvements over its almost three year model life so far, and we’d be reluctant to accept an early production one of those.

The $1000 deposits are refundable until reasonably close to when the car is ready to be produced, so there’s not a lot of downside if you choose to pre-order one.  But with delivery unlikely until, best case scenario, the second half of 2018, with the new updated total pre-orders, we’ll go out on a limb and say if you order now you’re unlikely to get a car until some time in 2019 or possibly even later – three or more years from now (see this article which suggests, back when reporting about 180,000 cars pre-ordered, some people might be waiting until 2020) – who only knows what the competitive landscape will be like by then, and when your deposit becomes non-refundable, you probably should take a careful look at what your choices are rather than automatically confirm your intention.

And with the Bolt having been on sale and delivered for probably three years by the time you have a chance of getting a Model 3, plus probably a new Nissan Leaf and who knows what else appearing, we’d guess there’s every good chance you might choose to switch from the Model 3 to something else.

  7 Responses to “The New Tesla Model 3”

  1. Hi David, We placed a deposit on the Model S when it was first possible to do so and we had a five month wait; during that time, my husband suffered a terrible accident (not car) and so we put our order on hold for 3 years. A few months ago, we took delivery about 21 days after reactivating our order for the newer S90D and actually are pleased that we had to wait. We were able to lease the car so we can walk away from it in 3 years when the non-updatable features will have been replaced with newer and better features (something that our best friends are unable to do with their 3 year old Tesla).

    Do we wish we had waited for the new Tesla 3? No because we wanted the larger battery and more powerful car (that’s a guy thing) that our S90D has now but which it wouldn’t have had if we had gotten it 3 years ago). Are we excited about the Model 3? Absolutely! We would buy it over any GM, Ford, or other product simply because we LOVE Elon Musk and what he stands for (and he’d better not ever disappoint us): high quality, innovation, thinking outside the box, strength, integrity, and GENIUS! We support him (and SpaceX, too – he is putting NASA to shame for their old-fashioned, blinder mentality). I did buy a Ford hybrid last year which I LOVE but wouldn’t get a Model 3 until it has a range of 500 miles because frankly I get tired of having to stop to recharge after 3 hours on long drives). The “mileage” of 215 miles is, in reality, probably 180 because you will probably only get 215 miles driving under perfect conditions: flat roads, no head winds, and driving 55 mph. This I know from experience.

    Just wondering why you think it won’t be available until 2019? I wouldn’t expect them to be available until Dec. 2016 with most people getting theirs by late 2017. And actually, if I did want one, there’s no harm waiting to order it next year (unless the deposit remains to be refundable indefinitely).

    • Hi, Victoria

      The S90D is a massive improvement over the earlier 85 models, but also a disappointment. After three years, all they do is increase the battery from 85 kWhr to 90 kWhr? As you surely know, rumors are already circulating of a 100 kWhr or larger battery pack option, and I totally agree with you on the range thing. Usable effective net range, and with a bit of emergency up your sleeve, is considerably less than theoretical maximum range, plus if you want optimum battery life, you never charge above 90% and seldom above 80%, and also don’t let your charge go below about 20%.

      As for the Model 3 delivery schedule, no-one really knows, and I think you slipped a year in your numbers – deliveries might start at the end of 2017, not 2016. Tesla says it expects to start deliveries at the end of 2017, and hopes to be producing 500,000 cars a year by 2020. What this will translate to, in terms of numbers of Model 3’s shipped in 2017 and 2018 and 2019 is anyone’s guess at present, and has to be colored by Tesla’s chronic inability to release models on time or to achieve annual production targets in any year previously.

      I’ve added a link in the article, as well as a couple more updates to the growing count of pre-orders, during the day. We’re now at about 200,000 cars pre-ordered, and at least one analyst is saying that new orders placed now might not be fulfilled until 2020.

      It is reasonable to expect only a very few Model 3 cars will ship in 2017, and perhaps 100,000 – 150,000 in 2018, best case scenario. So, with 200,000 pre-orders, we’re best case already into 2019 for deliveries. Worst case could be anything at all (or nothing).

  2. David:

    The major difference, and it is huge, between the Tesla Model 3 and all other electric cars is the time it takes to charge them. If you drive the Bolt or any other EV car 200 plus miles, you will need 9 hours or so to recharge fully. With a Tesla, a couple of hours using the Tesla Super Charger Station.

    But more importantly, with the Tesla Super Charger Stations conveniently located in most areas, you can recharge the Tesla in about 30 minutes to about 70% capacity, time for a cup of coffee and bathroom break on your journey. It’s the last 30% that takes so long to charge. One can easily drive to LA from SF with only 2 30 minute stops.

    No other electric vehicle can do this. A trip from LA to Seattle in another electric vehicle would probably take you a couple of days.

    John in Oakland (and owner of a Tesla S 70 D)

    • Hi, John

      I envy you your S70D, although if it were me, I might have tried to reach a bit further for an 85 or a 90, just for the extra range.

      I’ll grant you that Tesla Superchargers are faster than other charging methodologies, and a big difference, but is it also an important difference? I suggest not.

      For regular ‘around town’ running, the usual paradigm is to drive all day and then charge all night, and that works perfectly well with any electric vehicle and its 240V charging system. It is only when people are considering cross-country, long-distance driving, that charging time becomes an issue.

      Other high-rate DC charging methodologies are appearing too, although none with the coverage (and ‘cost’ – ie free) of the Tesla Supercharger network. But that will probably change, particularly if we see other EV manufacturers agreeing on a standard so as to accelerate the roll-out of their alternate charging methodology. And the Supercharger network is apparently sometimes becoming a bit stressed now – your ’30 mins to 70%’ assumes you’re not sharing a double charger with a second car and also assumes you can drive right up to a free double charger and not have to wait for other cars to clear.

      I also think the ‘only 30 minute’ statement contrasts with how most people like to top up their cars with gas. I don’t know about you, but it surely takes me less than 30 minutes for a bathroom break, and the cup of coffee, if I buy one, goes into the car and travels with me. Your two stops between Los Angeles and San Francisco represents as the better part of an extra hour of travel time, compared to one stop with a regular gas powered car.

      The other thing is that while the Superchargers are growing in number, they’re far from omni-present. Many of the routes I’d like to take a Tesla on in the Pacific Northwest (the second most populous Tesla region in the country) don’t have chargers, making it very difficult to countenance traveling by Tesla (ie into the Olympic National Park, or over into Eastern Washington and places such as Leavenworth and Lake Chelan). That forces one into the same 9 hr type solutions as anyone else.

  3. David, thank you for a good article. I think you have written a balanced and candid view of the new Model 3. While you don’t see it as a game-changer per se, looking back several years from now, we may see its announcement, along with the Chevrolet Bolt and new version Nissan Leaf, as a tipping point for mass adoption of electric vehicles (EVs). Price will certainly impact that, along with the potential total cost of ownership compared to gasoline vehicles.

    As Tesla Model 3, Chevrolet Bolt, Nissan Leaf, and other competing brands expand their offerings, as charging stations become ubiquitous, and best of all, as the novelty of owning or leasing an EV wears off, a broader segment of the market who are not early adopters by nature will warm up to these, especially when they discover the potential performance EVs can offer.

    That said, EVs constitute a tiny fraction of total car sales, and will likely continue to do so for the next decade. America still has a love affair with all things big, including SUVs, pickup trucks, and big engine sedans and sports vehicles. The irony is that most pickups and SUVs never see the business end of a dirt road or dry stream bed, but that never stopped people from wanting to live their dreams, even if their monster truck never sees anything but asphalt. Ditto for the accountant who pays way too much for a totally tricked out Lamborghini or ‘Vette that will never make use of its expensive carbon fiber ground effects fairings. But I digress. We’re Americans, dammit.

    My only disappointment with the Model 3 is the lack of a hatchback, its designers opting for a smaller rear trunk instead (I will assume that it will come with a front trunk, a definite plus). I have a deep aversion to sedans and muscle cars for their inefficient use of space and cargo capacity, and not designing a hatch like the Model S is a lost opportunity to me. But I did note that Elon Musk alluded to this being “Part One of a two-part announcement” so I am not without hope. Others may disagree with me, and that’s fine. To each their own. That said, having one massive piece of glass, while an impressive achievement, may dramatically increase the replacement cost if a windshield is cracked, or shattered in an accident. We will see.

    Again, thank you for your details and insights. I’m not worried in the least that the Model 3 breaks no new radical ground; in fact, that might be a feature. To pare the costs down to under $40K is an achievement by itself, and offers the chance for dramatic growth of the Tesla brand.

  4. Aloha, John:

    I’m recently retired, & am considering buying the Model 3. What I haven’t heard anything about is how the car performs in mountainous terrain. Here on Oahu, range isn’t a problem – it’s about 100 miles to circumnavigate the island – but to get anywhere from where we live, driving through the Ko’olau mountains is a must. My current Honda CR-Z hybrid gets just over 40 mpg, which I realize would be a lot higher if we had freeway driving out here…there are only two limited areas where it’s legal to drive even 60 mph.

    I’ve driven two electric cars, & neither of them fared well at all going uphill. The Tesla seems to have a lot more power, but how does its range change for the type of driving I would be doing? Also, there are no superchargers in Hawaii to date, so I assume I’ll be recharging from my home’s 10 kW solar PV system, & I’m very interested in where you get your data on never charging above 90%, & seldom above 80%. I’ve an engineer for a long time, & thought keeping a Li-Ion battery close to fully-charged was the best way to maintain it.

    Thanks!

  5. […] you surely know (because I wrote about it!) the launch of their future Model 3 car resulted in over 400,000 pre-orders, and with each […]

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