Although the company is clearly at the top of its field, Tesla Motors Inc. (NASDAQ:TSAL) is gearing up to enter a new market, one that seems eager to welcome it, too. With the Model 3 comes the EV giant’s long-awaited entry into the affordable car space. However, the leaders of the mid-market, electric and hybrid car space aren’t the only players who should be concerned about Tesla’s most affordable EV. Rivals in the luxury car space have much to be worried about, too. With the EV world finally entering the year of the Model 3, it is clear that the upcoming Tesla is the most anticipated vehicle ever.
Model 3 Cost Incentives
In terms of price, cost is perhaps the most appealing aspect about the Tesla Model 3. Elon Musk, the company’s head visionary and CEO, has assured buyers that the car will go for $35,000 at its most standard. Pricier variants will of course be available, too. These would depend on the various add-ons which the buyer can opt for.
The Model 3 can be reserved for a refundable $1,000 deposit. The last official number of reservations is said to be around 400,000. That figure was obtained within weeks of the the car’s unveiling and promises to spike closer to the it release.
Another interesting thing to know is that there will be $7,500 tax credit allocated to the Model 3. That means anyone buying the standard $35,000 model could only pay $27,500. The catch is that this tax credit will only apply to the first 200,000 claimed rebates. The company states that the financial quarter which follows the achievement of the 200,000 threshold will see the rebate lowered by 50 percent. The same will be done during the third and fourth subsequent qaurters. After that, no rebates will be issued.
Model 3 wins new markets for Tesla
Tesla owners are shown to consider a few other car brands before settling for a Model S or Model X. The likes of Mercedes-Benz, BMW, Audi and Porsche are just some of the luxury car brands that are often considered. Research by edmonds.com reveals that buyers tend to stop at several luxury car dealerships before arriving at Tesla showrooms. According to the study, buyers in March 2015 had considered opting for a host of automotive leaders before the EV producer. The premium car space has been dominated by German automotive brands for decades. However, Musk and his company are steadily eating away at the appeal of traditional, high-end cars.
The general misconception is that the upcoming Model 3 will be aimed at pulling in the otherwise Toyota Prius, Nissan Leaf or Chevy Volt buyer. While the car does stand to lure many of those consumers to Tesla, it is in fact better directed at the likes of Audi’s A4 and BMW’s 3 Series. Elon Musk relayed this himself.
The new Tesla is expected to be released sometime in the later part of this year. After the firm shared its Q1 2015 financial earnings, Musk said the Model 3 was set to go into production on the 1st of July 2017. However, due to setbacks within the car’s supply chain, the CEO also said Tesla is likely to miss its production deadline. The news may have come as a surprise to those unused to Tesla. On the other hand, those more familiar with the young, American car maker and its production trends might have expected such misses.
Luxury car buyers opt for Tesla
In terms of Tesla buyers last March, the most considered car maker in the EV maker’s stead was BMW. Nearly 30 percent of all Tesla buyers in that month thought of getting themselves a Beamer. Exactly 20 percent felt Audi might have been a viable option while another 19.3 percent considered a Mercedes-Benz. Just over 11 percent might have got a Porsche. But in the face of all of this, luxury car buyers have opted for a sportier and more innovative car over traditional luxury.
Tesla Motors Inc was felt to be the best option. The research conducted by Edmonds.com adds weight to Musk’s earlier claims. Bearing this, luxury car buyers are growing more inclined towards the Tesla brand. This is further supported by the increase in the Model S’s demand along with the recent Model X.
Premium automakers aren’t the only one would have to beat Tesla away from its consumer base. Edmonds.com shows us that young American Vehicle maker is also eating in well into the mid-market. The same study conducted in March shows that 23 percent of Tesla buyer thought about buying a Toyota. This number is more than the 20 percent consideration given to Audi.
Honda, Ford and Lexus, too, were considered more than other leading premium car makers. Honda trumped Merc buyers at 19.3 percent. Ford and Lexus were though of more than Porsche. However, Tesla was eventually thought of as the better car brand.
Tesla wins appeal
What then could a cheaper EV do to Tesla’s demand? Officials claim that the the Model 3 is sitting a near 400,000 pre-orders. That’s under half a million people around the world who’ve laid down $1,000 deposits to secure themselves a concept car that is a little under a year from rolling out. It also more than twice the existing Tesla owners globally. Looking at that financially, Tesla has pulled in around $400 million from the Model 3 already. It is expected that the number could rise significantly closer the car’s actual delivery.
The growing appeal of the innovative Tesla brand has a lot to do with the exclusive, fun and completely revolutionary dimensions that it adds to luxury driving. Musk and his company have proven that EVs can be just as fun, if not far better, than normal EVs. Bearing this, the much, much more affordable Model 3 could be Tesla Motor’s great push to new heights.