The immensely anticipated mass-market electric car from Tesla Motors, the Model 3, is set to be unveiled next month.
To be shown off on March 31, the company said it will start taking reservation payments on the same day. Meanwhile, online reservations are slated to begin on April 1. The launch date has been set for late 2017. The price tag has been kept at $35,000.
Tesla isn’t the only brand to offer a vehicle in that price bracket, MarketWatch reports. The 2016 Audi A3 costs $30,900, the Mercedes CLA Class costs $32,050 and the BMW 3 series costs $33,150. The low and affordable prices are kept for a target audience of young adults who MarketWatch says could become loyal to the brand.
“Brand loyalty [for cars] is at an all-time low,” Karl Brauer, a senior analyst at Kelley Blue Book, said. “More companies are starting to market to customers at an early age with a low-priced car. Car makers have been able to pack a fairly high level of content and luxury features into these lower-priced models. You don’t feel like you’ve compromised as a buyer.”
The Model 3 has been priced at half the cost of the base version of the Model S. The vehicle also comes with a $7,500 federal deduction, with an offering of $2,500 in credits in some states. Kelley Blue Book said that the average price of new cars in today’s market is roughly $34,000.
Tesla chief executive Elon Musk said the company will reserve some features for the Model 3, which might help in a faster marketing of the car. “In retrospect, it would have better to do fewer things with the first version of Model X, and then roll in … new technologies over time,” he said. “I do think that there was some hubris there with the Model X.”
Experts say there could be a high demand of the new Model 3, though not a lot about the vehicle is known at this point of time. Jessica Caldwell, director of industry analysis at automotive research site Edmunds.com, said, “Tesla is very aspirational, especially for people who have been waiting to get into a Tesla because they couldn’t afford to buy a Model S or a Model X and they believe in Elon Musk’s vision. Many car buyers would be hard-pressed to name the heads of other luxury car companies.”
CNN reports that certain features, which ordinarily cost hundreds of dollars, will be impractical for an affordable and low-priced car. For starters, the “ludicrous mode,” which enables the car to speed from zero to 60 in only 3 seconds, is for an additional $10,000; while the autopilot feature costs $3,000.
“There’s a lot of uncertainty on what will be the technology of the future,” Caldwell said. “These companies must evolve with threats and that would be the strategy that’s going to move them forward to conquer the market.”