On Thursday night, Tesla unveiled a prototype of its newest car, the $35,000 Model 3, and made it available for preorder online.
Within 90 minutes, some 115,000 people had paid $1,000 apiece to reserve one when it comes out in late 2017. And within two days, that number had hit 276,000, according to CEO Elon Musk.
No updated stats were available on Tuesday, but it’s relatively safe to assume the number of reservations has climbed to more than 300,000. Musk said he’ll release the final numbers for the week on Wednesday.
From the beginning, the Model 3 has been Tesla’s raison d’être: the vehicle that Musk hoped would bring electric cars to the masses. The company’s latest all-new model, the Model S, quickly broke sales records for an all-electric vehicle. But if the early demand for the Model 3 is any indication, it has a chance to set some records that even conventional cars can’t touch.
First, an important caveat that bears repeating: Reservations are not sales. The people paying $1,000 to preorder a Model 3 now could easily change their minds by the time the car is ready, given that Tesla has made it clear that the deposits are refundable. Technically, then, Tesla has not sold any Model 3s yet.
That said, it’s fair to assume most people don’t just hand out $1,000 deposits unless they have at least some intention of making a purchase. And the numbers are pretty staggering. For comparison’s sake, here is the number of cars the leading automakers sold in March 2016, according to Automotive News. Note that these figures include all the cars they sold in that month, not just one model:
- Ford: 253,064
- General Motors: 252,128
- Toyota: 219,842
- Chrysler: 213,187
In other words, no automaker sold as many cars in the United States in the month of March as Tesla took orders for in two days.
This is, rather obviously, fantastic news for Tesla. And it should put to rest the notion that GM somehow stole the company’s thunder by releasing an electric car with a similar range and price tag a year earlier. (The $37,500 Chevy Bolt will go on sale by the end of 2016.)
And yet the success of the Model 3 is not a fait accompli. As this Statista chart shows, Tesla has been steadily ramping up production of its Model S since it debuted in 2012, nearly doubling its output each year. But the pace of Model 3 reservations suggests Tesla may have to exceed even this exponential growth curve if it is to keep up with demand.
To produce the Model 3 at a rate that dwarfs that of the ultra-pricey Model S has always been Tesla’s goal. It’s why the company is building the world’s largest lithium-ion battery factory in the Nevada desert. On the other hand, no company can sustain exponential production growth without running into some problems. And Tesla’s production target of 500,000 cars a year from its Fremont, California, assembly line was always going to pose a challenge.
Tesla, for its part, already has a track record of delays. In fact, it has yet to ship a new model on time. Its latest model, the Model X SUV, is finally beginning to hit streets this year, more than two years after it was originally scheduled to launch. On Tuesday, the company explained that production had been hamstrung by “severe Model X supplier parts shortages” that “lasted much longer than initially expected.” In a press release, spokeswoman Alexis Georgeson went on to attribute the snafu to, among other issues, “Tesla’s hubris in adding far too much new technology to the Model X in version 1.”
The self-awareness is refreshing, if not entirely reassuring: The Model 3, after all, is new from the ground up, unlike the Model X, which was based largely on the Model S. (Muskian flourishes like the “falcon wing” doors made the Model X more complicated than was strictly necessary.)
For those buying the Model 3, there’s one other reason to worry about its skyrocketing preorder figures: The $7,500 tax credit for buying an electric car starts to phase out once a company has sold 200,000 qualifying electric vehicles. So a lot of these Model 3s are going to end up costing the full $35,000 sticker price, rather than the effective post-rebate price of $27,500.
As I’ve written many times, it’s never wise to bet against Elon Musk when it comes to the success or failure of his products. Betting on him to be late, however, seems like a pretty safe wager.
Previously in Slate:
