Although Tesla is preparing to release the Model X vehicle, the Model 3 will also be a major release for the company. While the Model X SUV is considered to be something of a sexy vehicle, the Model 3 is Tesla’s first attempt to truly reach a mainstream market. If any electric car manufacturer can claim to have achieved this, it is certainly the market-leading Tesla, but in truth despite its billion-dollar reputation and status, the company still remains something of a niche supplier of vehicles.
This is not due to a lack of attention that Tesla has generated, in fact the electric car manufacturer punches well above its weight in this department. It is more due to the fact that convincing people to ditch their traditional gas-guzzling vehicles and instead purchase an electric car can be extremely tricky. And Tesla has not managed to achieve this on a mass scale as yet, despite the massive successes of the corporation.
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Model 3 to go mainstream
But the Model 3 is really an attempt to do just that, considering that Tesla has already indicated that this will be an extremely affordable vehicle for an electric car. And thus many people as of yet undecided on the concept of electric cars are monitoring the development of the Model 3 very closely. In this context, Tesla has released information this week that will certainly be of interest to many motorists.
The charismatic and high-profile CEO of Tesla, Elon Musk, has stated this week that the Model 3 will roll out in the next two years or so. Musk set an actual timeframe of 2-2.5 years for this hotly anticipated product, while speaking in Berlin at a Federal Ministry for Economic Affairs and Energy event.
This is interesting news, as one thing that Tesla is certainly not is a cash rich corporation. The meteoric rise of Tesla has ensured that its reputation is already pretty massive in the electric car marketplace, but it has been pointed out ahead of the release of the Model X that Tesla in fact needs to generate some cash flow pretty rapidly.
Tesla operates in an area of business in which a significant amount of expenditure needs to be invested in every new product, not merely in manufacturing, but also often in development. And this means that Tesla has often burned up huge amounts of its cash reserves by the time that a new product is ready for market. In this respect, the Model X is coming at the right time for the electric car manufacturer, but Tesla would certainly like to get the Model 3 into the public domain more quickly in an ideal world.
Tesla banks on Volkswagen malaise
But Tesla isn’t the only car manufacturer facing difficulties at the moment, indeed this is a massive understatement! Volkswagen was one of the companies expected to make a major move in the electric car marketplace, so the recent controversy regarding its emissions corruption has been a massive blow for the corporation. This could be beneficial to both Tesla and Apple, as the former attempts to cement its market-leading position, while the latter attempts to establish itself in the electric car marketplace.
Musk certainly didn’t miss the opportunity to comment on the Volkswagen situation, stating that he believed that the industry was generally failing to measure all of the appropriate environmental factors. Musk also spoke on the fact that human behaviour is changing the chemical constituency of the atmosphere and the oceans, and that action is necessary. Although these are extremely serious environmental issues, they do also represent excellent public relations opportunities for Tesla, as the latest product ranges become part of the solution to the overarching problem.
So as things stand, 2017 could be a massive year in the electric car niche, as Tesla puts the Model 3 into production. Certainly at the time of writing it appears that the carmaker has pencilled this date into its schedule, and the latter years of the decade will unquestionably make a massive contribution to the electric car marketplace. It has been reported this week that Apple is looking to release the first Apple Car in 2019, and by the end of the decade, the auto market in the United States could have a completely different appearance.
And the Model 3 electric sedan will potentially be as disruptive as the Apple Car, considering the ambitious specifications that Tesla have set aside for this vehicle. The Model 3 will apparently feature a 200-mile range and $35,000 base price when it is released, becoming arguably the first electric vehicle that could be reasonably described as truly affordable.
The only downside for Tesla at the time of writing is that industry analysts remain somewhat sceptical about the potential of the corporation to deliver these supposed specs. It will be essential for Tesla to achieve outstanding battery production in terms of affordability in order to make the $35,000 figure, and certain industry analysts believe that this will be impossible.
Jefferies back Tesla battery potential
However, Tesla also has its fair share of bankers. Tesla has been one of the most divisive companies in the world of business, and this has resulted in a share price that has been pretty volatile. Many investors remain unconvinced by the electric car niche, while some believe that Tesla has excellent demographic opportunities for the future.
In particular, a Jefferies analyst suggested this week that Tesla’s enormous “Gigafactory” will combine with advances in battery chemistry to ensure that Tesla can appreciably reduce Model 3 battery costs. This would enable Tesla to deliver a mass-market vehicle, and it could be the shot in the arm that truly sees the company reach the next level in its status.
Tesla may also be able to collaborate with Apple in the future, and Musk claimed this week that a non-German European automaker contacted Tesla about using the company’s Supercharger network in the future. These are major economic assets for Tesla at a time when it is attempting to establish a new and aggressive business model.
While other companies will also benefit from technological developments in the electric car industry, Tesla has put in place enough infrastructure to suggest that it can remain the leading electric car manufacturer for the remainder of this decade. And the Model 3 will be critical to this aim.