The auto world is in Mild Freakout Mode over the soon-to-arrive Tesla Model X, but Tesla Motors isn't content to rest on its buzzing laurels. Yesterday, the company -- or rather, its CEO Elon Musk -- wanted to remind Planet Earth that there's another Tesla model in the works, and we'll get our first glimpse of it next year.
Model 3, our smaller and lower cost sedan will start production in about 2 years. Fully operational Gigafactory needed.— Elon Musk (@elonmusk) September 2, 2015
@elonmusk $35k price, unveil in March, preorders start then.— Elon Musk (@elonmusk) September 2, 2015
That price would slot the Model 3 far, far below the Tesla Model S -- less than half the price of the current $75,000 base model. If, as we've seen reported, that $35,000 is the new model's price before federal and state tax credits are applied, it puts the Model 3 within the budgets of many more would-be buyers. (Even though, at a projected range of 200 miles, it won't have quite the capabilities of the S.)
Something else could make the Model 3 more attractive to a broader swath of shoppers, too: a crossover variant. As our colleagues at Green Car Reports point out, there's been a good bit of talk about a crossover version of the Model 3, which would go on sale after the sedan rolls out.
That said, there are plenty of "ifs" in all this. Most importantly, for Tesla to price the Model 3 so low, it'll likely need to achieve significant economies of scale at its new gigafactory outside Reno, Nevada. That means that the facility will have to get up and running soon, and it'll need to ramp up capacity quickly.
That's not out of the question. Considering (1) the strong demand for Tesla vehicles to date and (2) the possibility that the company may score deals to produce batteries for non-Tesla vehicles, the gigafactory's assembly lines could be zipping along soon after the ribbon-cutting. However, neither the Model 3 nor the gigafactory have been completed yet, so Musk's projections could be a tad optimistic.
It wouldn't be the first time that's happened: Tesla has missed several of its production deadlines over the years. Hopefully, those miscalculations have chastened Musk & Co. a bit, though, so if there are delays on the Model 3, they won't be too long. If production stays on track, and if the Model 3's starting price stays around $35,000, Musk could get his wish of making 500,000 vehicles a year by 2020.