Tesla Motors plans on expanding its customer base even further Thursday night when it debuts its Model 3 electric car, which will be its cheapest vehicle to date.
The Model 3 starts at $35,000, before federal and state government incentives, which is much less expensive than the Model S luxury sedan, Model X SUV and Roadster sports car. Those interested in buying the car can start putting down $1,000 deposits today.
Providing a lower-priced car has been a goal of Tesla's since the company was founded 13 years ago. CEO Elon Musk even said in a 2006 blog post that the firm wanted to bring the world into a solar-powered future by building "a wide range of models, including affordably priced family cars."
The Model S currently starts at $71,000, while the Model X starts at around $80,000. In addition to costing less than its brothers, the Model 3 will be just as affordable as electric cars from General Motors, BMW and Nissan. Costing $35,000 before incentives means that there is a chance that the vehicle's base price can drop to as low as $28,000, depending on the state.
Tesla faces several challenges in obtaining more customers, such as low gas prices and competition from well-known automakers. In addition, IHS Automotive noted that while sales for new EVs in the U.S. went up six percent last year, these sales still only account for less than one percent of the overall vehicle market.
However, car buying site TrueCar.com reported that 35 percent of new cars purchased in the U.S. last year cost $35,000 or more, while only 2.1 percent cost $75,000 or more.
"The Model 3 is going to be a pivotal model for Tesla," TrueCar senior analyst Patrick Min said.
While Tesla has kept quiet about the Model 3's details, the EV is expected to have a 200-mile electric range when fully charged, which is almost twice the range of the Nissan Leaf, BMW i3 and other competitors in its price range. The vehicle was also previously reported to have less features than the Model S and Model X, as well as a more compact body.
Potential customers shouldn't expect to receive their Model 3s anytime soon, as deliveries for the vehicle are scheduled to begin at the end of next year.
Tesla plans on increasing sales from around 85,000 this year to 500,000 by 2020, and tonight's unveiling of the Model 3 may help bring the company one step closer to achieving that goal.
