Tesla Model 3 to go into production in 2017 - CEO Musk
Fans had camped out overnight, queuing outside Tesla stores across California to put down deposits on the car in scenes reminiscent of the launch of Apple Inc products.
The Model 3 is crucial for Tesla to reach its goal of selling 500,000 cars per year by 2020. The success of Tesla’s Gigafactory, its battery factory near completion in Nevada, is also contingent on the Model 3.
Tesla says scale from the massive facility will cut the cost of its battery pack by 30 per cent to enable the lower-priced vehicle.
Tesla Motors chief executive Elon Musk with the new Model 3. Picture: AP.
High expectations ahead of the unveiling have restored Tesla’s shares to around the $US230-mark, recovering from a year low of $US141.05 in February after analysts cut price targets and revenue expectations.
"It is important to the industry because it will signal whether or not Tesla Motors is a major threat to the status quo or just another wannabe car company with a fleeting chance for long-term success,” said Kelley Blue Book’s Jack Nerad.
GM is on track to beat Tesla to the market with its Chevrolet Bolt electric car, which GM says will launch late this year, offering about 200 miles of electric driving range and a starting price of around $US35,000.
A new generation of Nissan Motor Co’s Leaf electric car is also expected to offer more driving range at a similar price.
Tesla unveils its new Model 3 in California. Picture: AP.
The Model 3 and others in the new generation of electric vehicles face challenges from low petrol prices, high battery costs and uncertain investment in recharging infrastructure.
Through the first two months of this year, sales of all-electric and hybrid vehicles are down nearly nine per cent to 60,384 vehicles, data from trade group the Electric Drive Transportation Association shows.
That’s fewer hybrid and battery electric vehicles sold in two months than Ford sold of its F-series large utilities in February alone.
The new Model 3 Teslas. Picture: AP.
Several short-term concerns, such as that Model 3 production will be delayed, and the slow ramp of the Model X will continue, go hand-in-hand with sceptics’ longer-term worries that the unprofitable company will continue to bleed cash.
In February, Tesla said it would start generating positive cash flow this month.
