Gas prices are down to near record lows. Electric car sales in the US and elsewhere have been uninspiring. But when Tesla started taking pre-orders for its Model 3 electric vehicle, it seemed as if the world has gone crazy. Tesla received more than 325,000 pre-orders worth $14 billion in implied future sales for a car that is about two years away. We haven’t seen this kind of euphoria since the iPhone launch in 2007.
Most Model 3 buyers are early adopters
Some see Tesla’s mass-market Model 3 as an automobile disruptor. But skeptics have cautioned that the car may not move the mainstream America away from burning gasoline. They believe most of the 325,000 people who have reserved the vehicle are environmentally conscious, tech-savvy early adopters who admire Elon Musk and see Tesla as an innovative brand.
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Of course, Model 3’s 215 miles range and Tesla’s tech image also played a role. Surveys conducted by Carnegie Mellon University show that moving from tech-savvy to regular consumers would take a lot of effort. Electric vehicles currently account for only about 1% of the US car sales. Winning over enthusiasts and winning over the mainstream consumers are two entirely different things, said Jeremy Michalek, a professor of engineering and public policy at Carnegie Mellon University.
Will Tesla meet the massive demand?
Experts believe that it will take years of influence from early adopters to get the mainstream consumers to buy electric cars. On top of that, Tesla has a history of delaying the launch of its cars, which may prompt some people to go for other electric cars or buy a gas-powered vehicle. After humongous pre-orders, analysts wonder if Tesla will be able to meet the massive demand. Even Elon Musk admitted that the company would have to rethink its production plans and set up a factory in Europe.
Despite the skepticism, Tesla and Elon Musk have what it takes to build a successful business. People buy its cars because they are gorgeous, fast, safe and reliable. A survey conducted by the University of California Davis Institute of Transportation Studies found that Tesla buyers always rated breakthrough features like freeway autopilot, giant touchscreens, and over-the-air software updates as paramount. In short, Tesla is the new iPhone.