The New 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.

Update – within 30 minutes of the official announcement, orders had increased to over 125,000.

Update – By 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.

Update – After 24 hours, 198,000 cars have been pre-ordered.

Update – at 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.