Tesla’s new Model 3 has been in heavy demand with about $13.7 billion already collected from preorders nearly two years before the car will go on sale. But experts are still hesitant to accept it as the tipping point for mainstream drivers moving from gasoline to battery-powered cars.
Popular, but among a limited population
Tesla is seen as an innovative brand, mostly by people who are tech-savvy, environmentally conscious early adopters, and such fans have put down $1,000 deposits because they think the electric car meets their needs. The brand’s technology image and CEO Elon Musk’s success in solar panels, rockets and cars are the main drivers, while the $35,000 price tag and the Model 3’s 215-mile range are seen as secondary factors.
Tom Turrentine, director of electric and hybrid vehicle research at UC Davis, notes that Tesla buyers have always rated cutting-edge features such as freeway autopilot, huge touchscreens and over-the-air software updates as paramount. Electric cars did not have those features before, but the new Bolt will have some of them.
The Electron Global Fund was up 2% for September, bringing its third-quarter return to -1.7% and its year-to-date return to 8.5%. Meanwhile, the MSCI World Utilities Index was down 7.2% for September, 1.7% for the third quarter and 3.3% year to date. The S&P 500 was down 4.8% for September, up 0.2% for the third Read More
“There’s a big overlap in people who think about the future and green technology,” Turrentine said. “Tesla is really sitting right on that.”
Jeremy Michalek, a professor of engineering and public policy, said most U.S. customers do not even know the functions of an electric car. Currently, only 1% of the U.S. auto sales are electric cars.
Tesla Model 3 vs GM’s Chevy Bolt
Even GM’s Chevy Bolt, which is claimed to give over 200 miles of range per charge and is priced similarly to the Model 3, may not be able to attract buyers. Citing UC Davis research, Turrentine says that when asked to name rechargeable cars, hardly anyone can name a Volt, but they can name a Tesla. Also GM and other automakers don’t have Tesla-like tech panache, the survey showed.
The Bolt is due to hit showrooms this year, but Turrentine does not anticipate that demand for the car will be similar to that of the Model 3. Unlike Tesla, Chevy is not taking advance orders for the Bolt. A spokeswoman said Chevy will rely on GM’s vast dealer network, Internet connectivity and high owner satisfaction with the Volt plug-in hybrid to boost Bolt sales.
Other automakers are also looking forward to revealing their own 200-mile electric cars in the same price range, said Sam Abuelsamid, a senior analyst for the Navigant research firm. The analyst also said automakers will likely have a reliability advantage over Tesla as it has struggled with quality problems in its current models.