Will Tesla Motors Inc Model 3 Be A Front-Wheel Drive?

Tesla Motors Inc (NASDAQ:TSLA) shares surged more than 5% in after-hours trading after the electric vehicle maker’s third-quarter results topped the consensus estimates. Tesla reported 2 cents a share or $3 million in earnings. Analysts polled by FactSet were expecting one cent a share in losses. The Palo Alto-based company’s Q3 revenue almost doubled from $431 million last year to $852 million in the latest quarter.

Tesla Model 3 to be based on an all-new platform

Tesla CEO Elon Musk said at the earnings call that the recently unveiled all-wheel drive (AWD) variant of Model S is a precursor technology for the mass market Model 3. The affordable car is scheduled to hit the roads by 2017. Musk has revealed that the Model 3 will rival BMW’s 3 Series. Tesla CEO said that the company’s third-generation car won’t just be a cut-down version of the Model S or Model X. It will be based on an all-new platform.

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Damon Lavrinc of Jalopnik says that the Model 3 would be rear-wheel drive, given Elon Musk’s love for performance and the lack of powertrain packaging constraints. But it’s entirely possible that the Model 3 platform could have a few variants such as a standard version, an AWD model and an SUV. That’s still possible if the company launches a front-wheel drive (FWD), followed by an AWD model.

Most electric vehicles come with FWD

However, there is little good reason for Elon Musk to make FWD Model 3. Almost all the existing electric vehicles including Ford Focus, Nissan Leaf and Fiat 500 are based on FWD platforms. Unless the Tesla team can make an FWD system more efficient, Elon Musk is unlikely to go ahead with it. The company may launch an AWD mass market car at first.

But that makes little sense from the sales and marketing perspective. Launching an FWD or RWD at first, following by the ‘next big thing’ AWD makes more sense. Tesla says its mass-market car will be priced at around $35,000. The company plans to bring down the cost with the help of cheaper battery technology from its Gigafactory.

Tesla shares were up 4.78% to $242 in pre-market trading Thursday.