With Model 3, Elon Musk's Tesla launches hottest e-car

Vehicle to cost around Rs 50 lakh, including customs duty; Amit Bhawani, a tech blogger, is the first to pre-order the vehicle in India

Fans of luxury electric car maker Tesla Motors camped out overnight and stood in long lines to put down deposits on Model 3, its new premium sedan, which saw more than 130,000 bookings within 24 hours of launch. In scenes reminiscent of the launch of Apple iPhone, would-be buyers of the Silicon Valley carmaker’s latest model pitched tents and set up camping chairs on the sidewalk outside Tesla stores, which began taking pre-orders.

Elon Musk revealed the sedan, on which the electric carmaker is counting to reach sustainable profitability. The $35,000 Model 3 will have a minimum 215 miles (346 kilometres) range, and Musk said he’s “fairly confident” deliveries will begin in 2017.

“We have an amazing product. I think you’ll be blown away,” Musk, 44, said onstage at the company’s California design studio. “You will not be able to buy a better car for $35,000 or even close. It’s a really good car, even with no options.”

The Model 3 is the linchpin of Tesla’s plan to reach beyond affluent buyers and make electric vehicles a significant part of the auto market. Much of the car’s platform is new, including the battery architecture and motor technology. Many executives who worked on the Model 3, including technology chief J B Straubel and chief designer Franz von Holzhausen, have been part of the company’s leadership team for years. The number of reservations exceeded some analysts’ estimates and is more than the roughly 107,000 vehicles Tesla has sold to date. At $1,000 each, the deposits would infuse the company’s coffers with at least $134 million.     

While the reservations are refundable, the outpouring suggests there will be plenty of demand for the company to work through once production gets under way.

Hardware for Tesla’s Autopilot features will be standard and the four-door sedan will seat five adults. Design features include one large, continuous piece of glass for the rear roof area to enhance visibility.

While the Model 3’s base price still makes it a luxury model, it is not nearly the financial stretch for consumers as the $75,000 Model S.

“I’ve been waiting to buy an electric car for 10 years,” said Mark Dilsizian, a doctoral student at New Jersey’s Rutgers University who also runs a software start-up.

“It’s safer, it’s greener, it’s better performing, it’s better designed.”

Tesla’s “master plan,” laid out by Musk in August 2006, was to enter the auto industry at higher-end prices, then drive down market as fast as possible with increasingly higher volumes.

Model 3 is the company’s fourth car, after the Roadster, the Model S sedan and the Model X sport utility vehicle. The Model X was unveiled in February 2012, with delays pushing back the initial deliveries to customers until September 2015.

Model 3 faces an increasingly competitive landscape. General Motors plans to release its all-electric Chevrolet Bolt at a similar price point later this year.

Model 3 likely will target buyers who also would consider small luxury sedans such as the Audi A4 and BMW’s 3 series.

Shares of Tesla Motors Inc jumped as much as 9 per cent before the opening bell on Friday and were set to open at their highest in six months.

Tesla plans to sell its most affordable car yet in India. Prior to the unveiling of the new car, Tesla drew the attention of technology and corporate leaders in India.

Vijay Shekhar Sharma, co-founder and CEO of Paytm, re-tweeted Musk’s initial remark while Vishal Gondal, the founder of GOQii tweeted to Musk asking, “Where/when can I pre-order for India Red colour?”

Amit Bhawani, who runs PhoneRadarBlog, an advisory blog on smartphones and gadgets, was among the first to pre-order the Model 3 in India. If imported into India as a complete-built unit (CBU), it will attract 125% customs duty and would cost around Rs 50 lakh. Venture capital investor Mahesh Murthy also booked the car on day one.

Locally, homegrown electric car manufacturer Mahindra Reva plans to launch an all-electric version of its Verito sedan for around Rs 13 lakh and is expected to have a 100-km range. Mahindra Reva already sells its electric hatchback e2o and is building a premium electric sports car which it showcased at the 2014 Delhi auto expo.

Musk said Tesla plans to produce close to 500,000 vehicles a year (including Model S, Model X). Last year, the company delivered just 50,580 cars and the increase in production will ride on the back of Tesla’s Gigafactory, the lithium ion battery factory that is being setup in Nevada, US.

This isn’t Tesla’s first tryst with India. Last year, Musk had tweeted that setting up a Gigafactory in India would make sense in the long term. Last year, Musk met Prime Minister Narendra Modi during his visit to Silicon Valley.

In India, there is an increased push for electric vehicles. The governments of Delhi and Karnataka have already eliminated all local taxes on electric vehicles.

Further, under the National Electric Mobility Mission plan, the central government is planning to offer subsidies on electric vehicles, with a target of having seven million electric and hybrid vehicles in India by 2020.

The government has also created a working group under transport minister Nitin Gadkari which is evaluating the possibility of switching entirely to electric vehicles by 2030.