Enthusiasm is running high for Tesla’s next car, but there are reasons to be wary.
Tesla’s Model 3 electric car could be the top selling car of the year – even though none have been made yet.
A week after the vehicle was introduced on March 31, Tesla Motors had received a staggering 325,000 pre-orders. Without test driving the car or knowing what it will look like, each customer put down $1,000 to reserve a vehicle, the first of which are expected to be delivered in late 2017.
The car is considered a game changer for eco-friendly products with mainstream appeal. Company officials say the electric car will have a range of more than 200 miles and will be able to accelerate from 0 to 60 miles per hour in less than six seconds, a huge plus for car enthusiasts. It also will have seating for five, and rear and front trunks.
The Model 3 has a list price of $35,000 before tax incentives, although Tesla CEO Elon Musk has said the selling price for the average option mix will be closer to $42,000. That’s a bargain compared to other Tesla vehicles and one of the reason the cars were so desirable to the company’s fans.
The overwhelming response for the Model 3 has generated comparisons between Tesla and Apple. Every Tesla launched is like a new iPhone that everyone wants to see and own.
Yet such comparisons aren’t so clear cut. The automotive business isn’t like the consumer electronics business. Tesla’s overwhelming preorders doesn’t guarantee the company will become hugely successful and reap the kinds of profits that have made Apple a global giant.
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Prior to reserving a vehicle, customers only saw a hand-built prototype that may or may not look like what comes off the assembly line. By the time the vehicle comes on line, many customers might decide they would rather have their deposit back than buy a car that doesn’t meet their expectations. With other automakers rushing to sell their own electric cars, customers also might find something else they prefer over the new Tesla.
In other cases, people’s financial situations might have changed and they can no longer afford a new car.
Apple can sell hundreds of thousands of a new iPhone model at $500 each on reputation alone. Tesla and other automakers, however, might not be able to. Phones are relatively simple to manufacture compared to automobiles, and the quality of phones is determined by design, materials and software, rather than the manufacturing process.
While Tesla has proven it can create the hype of Apple, it remains to be seen if it will make a car that lives up to that hype for the mainstream public seeking reliable, affordable transportation.
