This year, “2017,” is very important for Tesla Motors, the electric car making giant, as it is going to launch its first mainstream and affordable electric car dubbed “Model 3”. The mass-market electric vehicle is priced around $35,000 after tax credits and tax breaks are applied. The Model 3 will deliver over 200 miles of range on a single charge.
The affordable Model 3 will be expensive for Tesla Motors
Also, the Model 3 will use Tesla extensive Supercharger network for charging, however the charging is not free and will cost the driver a particular fee. The Supercharger network will allow long-distance drives to the Model 3 owners. The electric carmaker is unveiling the mass-market vehicle for its mid-stream consumers after selling around $100,000 luxury sedans, including Model S and Roadster, for many years. In 2015, the automaker had added the luxury sedan Model X but it was not affordable for all customers.
In 2016, the electric car maker finally came with Model 3, which it unveiled in March last year. The electric carmaker had reported that over 400,000 per-orders were received for the Model 3, at $1,000 a-piece. The 400,000 pre-orders proved that the electric car was very much in demand in the market.
For a long time, people have been waiting for an affordable Tesla and Model 3 was the answer to their prayers. However, the path for Model 3 to be successful has its pit holes and it is not exactly the easiest or the smoothest path. There will be a huge shift in the car industry in the coming days. The chief executive of Fiat Chrysler Automobiles, Mr. Sergio Marchionne, says that the change is underway. Some experts believe that pickup trucks and SUVs are going to be the vehicles of future, not small cars like Model 3.
Will Tesla be able to build the Model 3 at such a low price?
The main problem right now is whether the automaker will be able to build their car at such a low cost. Industry leaders are just trying to figure out what they should do with small cars or the less expensive cars as it is difficult to get a decent profit on a car that is priced around $20,000 or $30,000. The automaker will have the same issue but it would be interesting to see how it handles all its price-related problems.
It is quite difficult to bring a good or at least an acceptable margin on a $35,000 electric car. The best margins are gained in the cars that the EV making giant is already selling: the SUVs and the luxury four-doors. The electric car making giant can easily get an impressive gross margin, around 20% to 30%, on cars like Model S and Model X.