Tesla Motors Inc. is going to launch its new electric car, the Model 3, on Thursday. The model is going to be low priced one at $35,000 . The objective of the manufacturers is to increase the sale volume so that the revenue increases bringing in some profit for the company which the previous models like Model X and Model S have not ensured.
The company has attempted to make this model at a considerably lower cost. It is made of steel and not aluminum like the previous high priced models. The battery is also going to last for fewer miles on a charge compared to the existing models . These are the two cost saving techniques adopted by Tesla in the new model. The cost saving methods will not affect the technology used in the car. Acceleration and handling is going to be at par with the best cars in the industry .
It is projected that the new model will increase the annual sale volume for the company to 500,000 by 2020 providing tough competition to the ruling brands like Chevrolet and Nissan. Another boost is the sales will be the tax credit of $7,500 that Tesla buyers enjoy . But the tax credit will cease to exist once the sales volume of Tesla in the US touches 200,000. So the initial reservations for the model will be high at around 95,000 as projected by analysts. But analysts also point out that the delivery performance of the company has to improve to cater to such high demand. With a view to address such a large expected sales the company has already added new capacity in its assembly plant and established a new battery factory.
The new car is also going to face stiff competition from the electric cars Audi AG and Chevrolet Bolt slated to hit the roads in late 2016 with a price tag of $30,000 even lower than Model 3 .
Works Cited
Ramsey, Mike. "A Lot Riding on Tesla's Model 3 Unveiling." The Wall Street Journal 30 March 2016. English.
