Could the Model 3 be Tesla’s Apple II?
Elon Musk’s first affordable car could rocket the company into the automotive mainstream
As Elon Musk unveiled Tesla’s Model 3 Thursday, customers around the globe were already lining up to buy one. By the weekend, the sexy, eco-conscious darling of the automotive world had drawn nearly 300,000 orders — twice what the company expected.
Now Tesla must deliver, something it’s had a rough time doing over its decade-long existence. But if the Model 3 lives up to the company’s masterfully crafted buzz, it could make Tesla profitable for the first time.
“It’s possible the Model 3 could be for Tesla what the Apple II was for Apple,” said Karl Brauer, a senior analyst with Kelley Blue Book. “It was the Apple II that broke through.”
The Model 3, in other words, could make a fortune for Tesla, but could also transform an inaccessible, niche product — like the personal computer of the early 1980s — into a ubiquitous mainstay.
Or the Model 3 could turn into the automotive equivalent of the Segway — an overhyped piece of machinery that its inventor promised would change the world, but is really just a weird conveyance used by mall cops.
The car is Tesla’s first bid at the “volume” market. Priced at around $35,000, it’s tens of thousands cheaper than the models that have earned Tesla its reputation as an automaker for the environmentally conscious rich.
Now Joe Recycled Six-Pack can get in on the Tesla action. But first, the company has to accomplish something it hasn’t been able to before.
“To do a high-volume car is a very different thing — you have to be efficient, you have to be timely, you have to service the car,” Brauer said. “There are definitely hurdles, big hurdles, that Tesla will have to get over to transition from a niche to a volume carmaker, and it’s not going to be easy with the history they’ve got.”
Previous Tesla models, Brauer pointed out, had a few issues, and not just a bockety headlight or wobbly windshield wiper. “We’re talking about motors and battery packs,” he said. “Wealthy people who have multiple cars and backups, will put up with that. But middle-class people … they’re not going to.”
Still, based on buzz and excitement alone, hundreds of thousands plopped down $1,000 deposits for the car, which the company expects to deliver by the end of next year.
Buzz and excitement don’t often visit the “volume” car market, but it’s happened before. In the early 1990s, Mazda debuted its Miata, a little two-seater that became a huge hit, generating a backlog of customers and cementing Mazda’s reputation as a “fun” car company. In the early 2000’s Chrysler launched the PT Cruiser, a nostalgic wagon-ish hatchback that was an immediate blockbuster and helped boost the struggling company’s bottom line.
Each car shared something with the Model 3: Its sticker price was about average for its time.
“These cars had a very distinctive style, and they were seen as unique,” Brauer said, adding “the pricing was right in line with what people were paying for cars, but the car felt everything but typical.”
The Model 3 isn’t the first to enter “affordable” electric car market. Nissan has sold 200,000 electric Leaf vehicles and Chevrolet will release its electric Bolt in six months — two years ahead of Tesla.
But the Model 3 seems to have captured the car world’s attention, and that could mean a lot more electric cars on roadways around the world.
“The electric vehicle is only 1% of the market,” Brauer said. “This car could change that.”
