Tesla's (NASDAQ: TSLA) Model 3 is here, marking the start of the electric-car maker's attempt to build vehicles in volumes measured in the hundreds of thousands and -- if Tesla CEO Elon Musk gets his way -- eventually in the millions. Priced at about half of its flagship Model S sedan, Tesla hopes the Model 3's $35,000 price tag, combined with its impressive performance and features, will help electric cars start appealing to the masses.
On Friday night, Tesla unveiled the final version of the Model 3 and delivered the first 30 units to customers. As the company embarks on what will be Tesla's steepest production ramp-up yet in an effort to get the vehicle into the hands of more than a half-million reservation holders, here's a close look at the most important things we learned about the Model 3.
1. It sports 220 miles of all-electric range.
The Model 3's driving range was one of the biggest questions going into the event. Last year, Tesla had already promised that the Model 3 would have 215 miles of range or more. With an estimated EPA-rated range of 220 miles, Tesla exceeded its promise by 5 miles.
For $35,000, 220 miles of range is a big step for Tesla. The company's lowest-cost version of the Model S has a driving range of 259 miles and a starting price of $69,500.
2. Tesla offers two battery size options.
As it does with its Model S and Model X, Tesla offers a larger battery capacity option for Model 3 customers who want more range. For an extra $9,000, customers can get a Model 3 with 310 miles of driving range on a single charge.
This long-range battery option puts the Model 3 right behind Tesla's longest-range version of its Model S. The 100D Model S has a driving range of 335 miles. Of course, Tesla's 100D will set buyers back a cool $80,700 -- far higher than the long-range Model 3's price of $44,000.
3. Tesla will begin delivering its more expensive Model 3 first.
In an effort to simplify production, Tesla is delivering its higher-priced Model 3 with 310 miles of range first. Tesla says it will begin delivering the version with its standard battery this fall.
4. Enhanced Autopilot will cost $5,000.
While one of the most significant perks for Model 3 customers is that every unit comes standard with Tesla's second-generation Autopilot sensors, customers will still need to pay up to activate them.
To enable Tesla's Enhanced Autopilot, it will cost the same as it does for Model S and X owners: $5,000.
5. It will eventually be capable of driving itself.
At the Model 3's launch event, Tesla CEO Elon Musk was sure to reiterate that the Model 3 will eventually be able to drive itself. Of course, Tesla is sure to provide its boilerplate caveat for the feature on its website: "This feature is dependent upon extensive software validation and regulatory approval, which may vary by jurisdiction."
Tesla says its full self-driving capability will cost $3,000 and will require the Enhanced Autopilot upgrade.
6. It can cost up to $59,500.
With a starting price of $35,000, the Model 3 is still a premium vehicle. This is particularly clear when considering how expensive the vehicle can become with the selection of upgrade options. After adding in the long-range battery ($9,000), Enhanced Autopilot ($5,000), Tesla's upcoming full self-driving ability ($3,000), the Model 3's "premium upgrade package" ($5,000), a wheel-size upgrade ($1,500), and a premium paint job ($1,000), the Model 3 will cost $59,500.
7. The first Model 3 units are rear-wheel-drive only.
The Model 3 will be available only in rear-wheel drive configurations at first. This is yet another way Tesla plans to streamline production during the critical ramp-up phase. Later on, Tesla plans to add all-wheel-drive options, which should help improve the Model 3's range, driving performance, and acceleration.
8. Its design screams minimalism.
A look at the Model 3's wildly simple interior, which notably eliminates the driver's instrument panel and unashamedly exalts the 15-inch center touchscreen as the vehicle's vital centerpiece, reveals the Model 3's signature design trait: minimalism.
"We aimed for something that I think is a very simple, clean design. Since cars will be increasingly autonomous," Musk explained, "you won't really need to look at an instrument panel all that often."
9. Ramping up deliveries will be "production hell."
At the event, Musk reiterated how challenging the Model 3's initial production ramp-up will be. "Frankly, we're going to be in production hell," he said. This tough period of Tesla's production ramp-up will last at least six months, but maybe longer, he noted.
Tesla only expects to deliver around 100 Model 3s in August and just above 1,500 in September. By December, Musk thinks Tesla will finally start achieving more meaningful production volume; he's forecasting around 20,000 Model 3 deliveries during the month.
Of course, Tesla will need to deliver more than 20,000 Model 3s a month to really start making a dent in its hundreds of thousands of deposit-backed reservations. To this end, Tesla is aiming to achieve a production rate of 10,000 vehicles a week sometime next year.
10. Tesla is tripling its Superchargers.
Increasing production from an annualized rate of 100,000 units today to 500,000 next year means Tesla's Supercharger network will be tested. To prevent overcrowding at its Superchargers as its vehicle fleet grows rapidly, Tesla announced it is nearly tripling its total Superchargers, from about 6,100 today to 18,000 by the end of next year.
What it all comes down to
Beyond this new information about Tesla's Model 3, two key takeaways from the event stand out more than anything else.
First, the Model 3's final unveiling leaves no doubt about how compelling the vehicle is. Considering how easily the Model S rose to be the top-selling vehicle among similarly priced large luxury sedans, the Model 3 looks poised to be just as appealing at its price point. As long as Tesla can quickly ramp up production, the Model 3 will be the first truly compelling mass-produced affordable electric vehicle.
Second, despite all the hype surrounding the Model 3's launch, it's still unclear just how well the company will be able to execute on its ambitious production plans. Though the automaker's 2018 target for a 500,000-unit annualized build rate for its Model S, Model X, and Model 3 combined is admirable, betting Tesla can pull it off at this point is still a total gamble.
Musk's joke during the event about Tesla's upcoming challenge was entirely appropriate: "Welcome to production hell!"
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