Up until now, Tesla Motors has only released expensive luxury cars (which happen to be 100% electric). Taking a ride in a Tesla usually leads to the desire to take home a Tesla. But with the Model S sedan starting at $70,000 and the Model X CUV/SUV starting at $80,000, the market for these cars is fairly limited.
At the end of this month, Tesla Motors will unveil the much-hyped Model 3 sedan. And although we haven’t gotten a look at it yet (its design is a closely guarded secret), we know enough to suggest that it will be a smashing success. Here’s why.
Low Price Tag: $35,000 Before Incentives
In 2015, the average new car price was $33,560. The Model 3 has a target price of $35,000, but the net price will actually be lower for most buyers. Electric vehicles currently qualify for a $7,500 federal tax credit. So, if you pay at least that much in federal income tax, your tax bill will be $7,500 lower the year after you buy a Model 3 (or your refund will be $7,500 higher). So, the Tesla’s net cost will be $27,500 or lower for most buyers. This puts it well below the current average price American car buyers are paying for a new car. If your state offers any of its own EV incentives, your net price will be even lower. Of course, a highly optioned Model 3 will cost significantly more, but with the incentives in place, the net price paid should put it in the right ballpark for large-scale adoption.
Tesla is an Aspirational Brand
With Tesla’s current Model S and Model X offering exceptional performance and handling, futuristic design, high price tags, and an extremely high customer satisfaction rating, the company has established itself very quickly as one of the top aspirational brands in the automotive world. Even Certified Pre-Owned Tesla Model S sedans rarely sell for less than $60,000, which is still out of reach for most consumers. And the Model X CUV/SUV has had thousands of customers on the waiting list — some for as long as four years — as the company ramps up production. Just getting a test drive of a Model X requires a $5,000 deposit and an advance appointment at their travelling “Meet Model X” roadshow. The allure of the Tesla brand alone will be enough to bring many buyers into Tesla stores — or to the Tesla web site — to check out the Model 3.
→ Recommended: ~55% Of EV Enthusiasts Likely To Buy/Lease Tesla Model 3
Although the final look of the Model 3 is still a mystery, we don’t expect the design team behind the Model S and Model X to let us down. Just as the affordable BMW 3 Series retains many of the design cues of its more expensive brethren, we expect the Tesla Model 3 to pick up on the styling of Teslas that have come before it, setting itself apart from the similarly priced Chevy Bolt and Nissan Leaf.
Real-World Range of 200 Miles
There’s something immensely appealing about a car that has a “full tank” every morning, just by plugging it in overnight. And with a 200-mile range per charge, the Model 3 will be among the longest-range EVs on the market. According to a comprehensive study of American driving habits, 93% of the time, Americans drive fewer than 100 miles per day, and 95% of all respondents who used their cars to drive to work commute fewer than 40 miles each way. You can find out more here. And if you look at annual driving habits, the average car in the US is driven about 11,244 miles per year — fewer than 220 miles per week. At that rate, you’d only have to plug in your Model 3 once or twice a week to avoid running out of juice. Forget range anxiety. And say goodbye to smelly gas stations. You’re not going to be needing those any more.
→ Recommended: Electric Car Range Requirements, & Range–Price Tradeoff Preferences
Long-Distance Travel Enabled Through Superchargers
One factor that EV naysayers like to bring up is that most EVs are not suitable for long-distance trips. Tesla has virtually eliminated that objection through a worldwide network of Superchargers. With Tesla’s Model S and Model X, you can replenish about 60% of your range in about 30 minutes. So if you stop every 150 to 200 miles for half an hour you can drive up or down the East or West coast, or even drive the entire way across the country. Sure, it takes longer than the 10-15 minutes it takes to stop at a gas station, but it’s not that far off. And while owners of the Model S and Model X can charge at Tesla Superchargers for free, for the life of the car, we expect that there may be a premium to do the same with the Model 3. We hope to know more later this month.
→ Recommended: Importance of Tesla Superchargers, Battery Upgrades, Electric Car Benefits… (My EV Summit Presentation)
If you’re an environmentalist, it’s nice to think about the complete lack of emissions and exhaust fumes on an EV like the Model 3: a Tesla has no tail pipe! And while generating the electricity that powers the car does have some environmental impact, it’s much smaller than a conventional gas-powered car… or diesel-powered car. Even in states that use a high percentage of coal to generate electricity, studies have shown that an electric car has fewer net emissions than even the most efficient gas or hybrid car. And in states that use more renewable power sources and natural gas, the environmental impact of driving an EV is far superior to ICE cars. EVs also have much lower lifetime environmental impact compared to gas-powered cars, including the manufacturing process. You can read the latest report on this matter from the Union of Concerned Scientists here: Cleaner Cars from Cradle to Grave (2015).
If you install solar panels to charge your EV, your vehicle has even less environmental impact and will probably cost you much less to operate over its lifetime than a gas-powered car.
Lower Maintenance Costs and Delayed Obsolescence
EVs have much lower maintenance costs than gas-powered cars. Not only are there no oil changes (there’s no oil!) but the drivetrain of an EV is much simpler than an ICE car and this translates to fewer trips to the service center and lower lifetime maintenance costs. An EV has a battery pack and an electric motor, plus the necessary linkage between steering wheel, motor, and wheels. That’s pretty much it as far as propulsion and basic steering control goes. Of course, there’s also ventilation and cabin cooling/heating systems, automated control systems, and the various motors (and software) to operate windows, seats, and doors. But there is no carburetor, no starter, no exhaust system or catalytic converter, no transmission, no radiator, no pistons, no cylinders, no spark plugs, and none of the hundreds of other little components that go into an internal combustion engine. You’ll need to add washer fluid and buy new tires every once in a while, and eventually replace the brake pads. But even the brakes in a Tesla last a long time because they’re rarely used. Tesla cars (as well as many other hybrids and EVs) use a technique called “regenerative braking” to capture energy produced by slowing the car, and converting that to electricity in order to recharge the battery. If you ever had a bike with a headlight that was powered by a spinning dynamo attached to your bicycle wheel, regenerative braking is a lot like that, slowing the forward momentum to generate electricity. The actual brake pads on a Tesla are only engaged when you need to slow down very quickly.
And as far as software updates, those come over the air automatically to a Tesla. Using this method, Tesla has been able to roll out major updates to its Autopilot navigation system, including automated parallel parking and the “Summon” feature which allows your car to park itself in your garage (or come out to greet you) without anyone in the driver’s seat. For most other cars, adding major features like these would require buying a whole new car, or at least a visit to the local service center. The Model 3 will keep getting better over time as more features get delivered to it while it sleeps comfortably in your driveway or garage.
And for those who say you’ll need to replace the battery pack after 5 or even 10 years, this is really unlikely. A long-term study of Tesla Model S owners in the Netherlands shows that the average Tesla battery pack degrades to about 94% of its range after 50,000 miles and loses another 1% every 30,000 miles. So, based on the average of 11,244 miles driven per year, you should still have around 90% of your range (180 miles or so, on the Model 3) after 15 years of driving it. And in 15 years, replacement battery packs will certainly cost less and have even greater range, so a replacement might actually make sense if you want greater range in the future.
Tesla has previously announced that the Model 3 will start shipping to customers in late 2017, with production to ramp up in 2018. The company has begun sending out invitations to the Model 3 unveiling, which will be held in the Los Angeles area the evening of March 31. Pre-orders for the Model 3 will be accepted that day in Tesla stores and the next day (April 1) via Tesla’s website. Unlike the Model S and Model X, which initially required a $5,000 minimum deposit, a Model 3 reservation requires only a $1,000 deposit. And the reservation can be cancelled with a full refund if you change your mind. So get that wallet out and stay tuned for more information later this month.
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