The image of a sleek electric vehicle pops up, hinting at Tesla's ambitious journey. The Model 3, with its stellar reputation, garnered pre-orders for 400,000 units upon its release last year, marking what Tesla hoped would be a turning point for electric vehicles entering the mainstream market. However, the future of the Model 3 remains uncertain. On July 28th, Tesla will face a critical test with its delivery ceremony.
Tesla stands at a pivotal moment. Success could open the floodgates for electric vehicle sales, while failure might signal its decline. There's also the possibility of a mixed outcome. As Karl Brauer, Executive Publisher and Analyst at Autotrader and Kelly Blue Book, put it, "The next 12 months are very important to Tesla." The Model 3 and other affordable electric vehicles could push this segment into the mainstream, which is a game-changer for the industry.
Today’s electric vehicle market is booming, with costs rapidly dropping. Bloomberg New Energy Finance predicts that electric vehicles will become cheaper than traditional fuel vehicles by 2025. In the coming years, nearly every automaker will launch pure-electric models.
This quarter, Tesla faced challenges like a shortage of battery packs and declining sales. Despite ongoing losses, the transition to electric mobility offers hope. Analysts emphasize that Tesla must focus on boosting output and ensuring quality to maintain its lead in the EV space.
Last year, Tesla CEO Elon Musk promised that Tesla’s production capacity would rise to 500,000 units in 2018 with increased self-production. "The Model 3 is the first Tesla model designed for mass production, fundamentally different from its predecessors," Musk explained.
If Tesla achieves its production goals, they could double the number of electric cars on U.S. roads to 300,000 by the end of next year. Gil Tal of UC Davis' Plug-In Hybrid and Electric Vehicle Research Center believes Tesla's high-end models have transformed the market. "I think the Model 3 holds similar transformative power, potentially outshining all competitors," Tal noted.
Consumer concerns, however, remain practical. For instance, the Chevy Bolt, priced at $37,500, still costs more than comparable gas-powered models even with federal and state subsidies. San Francisco Councilman Phil Ting advocates for more subsidies to make electric vehicles competitive with traditional ones. California senators are considering his proposal.
Steve Chadima of the Clean Energy Business Association AEE emphasized the slow pace of electric vehicle adoption. Analysts warn Tesla must avoid the pitfalls of earlier models—ensuring quality and software reliability while addressing minor issues. Failure to meet broader consumer expectations could jeopardize Tesla’s plans for electric trucks, minivans, and semi-trailers.
Brauer insists Tesla must demonstrate reliability and build a robust after-sales network. Tesla's supercharging stations have expanded rapidly, with plans to add 100 service centers, 350 mobile service vehicles, and 1,500 service personnel.
Brauer noted Tesla’s longer-range vehicles give them a five-year head start. “Once Tesla was the sole player in electric vehicles, but now competitors are catching up,†he said.
Despite a slower growth rate over the past two years, the electric vehicle market continues to grow. The International Energy Agency reports it took just a year to double global electric vehicle ownership from 1 million to 2 million units in 2015.
Tesla's brand advantage is immense—it doesn’t need to spend on advertising due to Musk’s celebrity status. His appeal alone drove 400,000 users to reserve the Model 3 with a $1,000 deposit without knowing much about the car.
Chadima remarked, "Tesla has this unique ability to captivate its audience." Although priced at $35,000, the Model 3 can seat five adults with a range of 215 miles and cutting-edge technology, including potential autonomous driving features.
According to Lei Fengnet, over 90% of Model 3 reservations came from new customers. Consultant Matthew Pirkowski, who’d been观望 Tesla for years, finally ordered the Model 3 after its release. "While my BMW is great, Tesla is what I truly desire."
Musk’s Promises: Some Delivered, Others Deferred
As a busy leader who values efficiency, Musk sets ambitious timelines.
Last May, he announced the Model 3 would begin mass production in July 2017, with deliveries starting on July 28th. By March, he pledged to double Tesla's supercharger network to 7,200 stations by year-end. Tesla had 3,600 stations then, now reaching 6,050, with plans to hit 7,000 by year-end.
May last year also saw Musk promise Fremont would produce 100,000-200,000 Model 3s by the end of 2017. Yet, given current capacity, fewer than 100,000 Model 3s may roll off the line this year, with monthly production reaching only 20,000 by year-end.
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