Tesla Motors Inc (NASDAQ:TSLA) revealed more details about its upcoming Model 3 mass market car last week, and now there are lots of opinions floating around. Of course bulls see great potential for the car, which as of now, would fill a nice gap in the electric car segment of the auto industry.
Tesla headed for mainstream
Forbes contributor Hannah Elliott said she thinks Tesla Motors Inc (NASDAQ:TSLA) will hit the mainstream auto market when it launches the Model 3 “in a sudden, historic and irreversible way.” The automaker sold over 22,000 Model S sedans last year, and that number is expected to be just a small fraction of the number of Model 3 cars Tesla will sell. Tesla CEO Elon Musk himself has such high hopes for the Model 3 that he predicts they will ship half a million cars annually by 2020.
The automaker has already said that the Model 3 will start out at $35,000. Elliott notes that this is quite a low price compared to the other cars put out by competing luxury automakers. She said by combining the luxurious interior Tesla is known for with the Model S with a $35,000 car that can get a nice range on a single battery charge, the automaker will be able to hit it big.
Tesla aims for a breakthrough
She notes that the low cost of the car will be an important breakthrough for the auto industry, and not only because a luxury car maker will be selling a car for so little. She said that price is competitive even within the broader electric car market and the family sedan market. This means that Tesla may be able to convince more families to go electric because of the savings in gas costs.
The reason Tesla Motors Inc (NASDAQ:TSLA) will be able to cut the price of its Model 3 so much is because of the planned gigafactory. The automaker aims to become more vertically integrated and reduce supply constraints by making its own batteries.
Tesla’s Model 3 is a good size
Elliott also notes that size-wise, Tesla’s Model 3 fits right in between the huge sedan and the smaller sport sedan. This puts it solidly in the mid-size sedan category, which has been one of the most popular sizes of cars for some time and will probably remain so. It will be approximately 20% shorter than the Model S, picking up longer range because it will weigh less. Tesla is reportedly aiming for a 200-mile range for the car.