Tesla unveils Model 3 to fanfare; 115,000 pre-orders

CEO Elon Musk says Model 3 to start at $35,000; go into production late 2017

Michael Wayland
The Detroit News

Tesla Motors Inc. is looking to bring the best characteristics of its critically acclaimed Model S luxury sedan to mainstream consumers with the new Model 3.

Tesla Model 3

Tesla CEO Elon Musk on Thursday said the all-electric, smaller sedan will have a range of at least 215 miles, start at roughly half the starting price of the Model S at $35,000 and achieve 0 to 60 in less than six seconds,

“At Tesla, we don’t make slow cars,” Musk said during the car’s 11:30 p.m. EDT unveiling at the company's design studio outside of Los Angeles. “And of course there will be versions of the Model 3 that go much faster.”

Musk said the grille-less car will have five-star safety ratings in every category, semi-autonomous safety and driving features, “Supercharging” and fit five adults comfortably. It also features a panoramic pane of glass on the rear roof area, and will have front and rear trunks, which also were on the Model S.

The Model 3  marks Tesla’s first foray into the mainstream vehicle market following the $70,000-plus Model S and $80,000-$144,000 Model X. Musk thanked owners of the company's previous vehicles for helping fund the Model 3.

"The revenue from the Model S and the X is what's needed to develop the Model 3," he said. "The Model 3, with very high volume and all the engineering needed to achieve the cost reductions and the capabilites, it cost billions of dollars."

Musk said buyers reserved more than 115,000 Model 3 sedans on Thursday without seeing the car or knowing many details. Tesla also had a space online aside the livestream of the Model 3's unveiling Thursday night for viewers to input credit card information to reserve their car.

Thousands lined up outside showrooms around the world to put down a $1,000 deposit on the car, which the company expects to be delivered in late 2017.

However many industry analysts, based on past experiences with Tesla, expect production of the vehicle to be delayed into at least 2018. Musk somewhat joked about the company's production delays during the Model 3 unveiling, saying he feels "fairly confident that it will be next year."

Musk also announced lofty plans for its Gigafactory in Nevada, including ambitions to "produce more lithium-ion batteries than all other factories in the world combined." He said Tesla also plans to double its fast-charging stations to 7,200.

To help support the Model 3 and Tesla's goal of selling 500,000 vehicle a year by 2020, Musk also said Tesla plans to more than double the number of stores it has worldwide to 441 by the end of 2017.

Tesla Motors Inc. CEO Elon Musk speaks at the unveiling of the Model 3 at the Tesla Motors design studio Thursday.

Tesla continues to battle state regulators over its direct-sale model in which the company sells the cars directly to consumers. Several states, including Michigan, have outlawed the practice.

In October, Tesla applied for licenses to sell and service its luxury electric vehicles in Michigan, even though Gov. Rick Snyder signed legislation in late 2014 that bans the company’s business model of directly selling cars to customers.

Michigan Secretary of State spokesman Fred Woodham this week told The Detroit News that the applications remain under review while the state requests additional information.

Tesla applied for a “Class A” dealership license to sell new and used cars. Under the classification, it also must have a repair facility as part of its  business or have an established relationship with a licensed repair facility.

If the applications are denied, Tesla has not shied away from lawsuits over state laws that ban its direct-sales model.

Tesla in February confirmed the applications, saying they are intended to confirm that the 2014 law bars its direct sales methodology.

“Submission of the application is intended to seek the secretary of state’s confirmation of this prohibition,” a Tesla spokesperson said in an email to The News. “Once confirmed, Tesla will review any options available to overturn this anti-consumer law.”

The company does have a presence in Michigan through Riviera Tool LLC in Cascade Township near Grand Rapids, which the automaker bought last year and renamed Tesla Tool and Die Factory.

Tesla also has opened four fast-charging stations for Teslas in the state. Its website has said for more than a year that a Detroit service center is “coming soon.”

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