It must have been a relief to investors and Tesla enthusiasts alike.
CEO Elon Musk revealed Sunday that its much-anticipated mid-market sedan, the $35,000 Tesla Model 3, will reach its first buyers on July 28. That’s on track with the company’s previous estimates despite delays and production woes with its previous model, the Model X SUV.
Musk also noted on Twitter Sunday that the Model 3 had passed regulatory requirements for production two weeks ahead of schedule. So far, Tesla stock has jumped about 2% on the news.
Tesla’s Model 3 is the company’s first major push into broadening its consumer base. Here’s what you need to know.
The Tesla Model 3 price is less than its predecessors…
The base price for the Tesla Model 3 is reportedly $35,000, which is significantly lower than its previous models. The Model S can be had for $68,000, and the Model X costs about $82,500. Still, the Model 3’s $35,000 figure assumes that the buyer wants to add no bells and whistles. Last year, Musk estimated that the average Model 3 would cost closer to about $42,000.
That said, buyers might actually be prepared to pay even more than that. According to a recent survey of over 10,000 Tesla lovers on Model3tracker.com, the average buyer is actually holding about $50,176 in preparation of the Model 3. Some buyers may be eligible for state or federal alternative energy incentives, however.
…and there’s already a backlog of orders
According to an update from Tesla in May 2016, about 373,000 people want to buy the Model 3. For context, the electric automaker produced about 84,000 cars in 2016.
That likely means that some who reserved their Model 3 car late (reservations first opened in mid-2016) may have to wait until mid 2018 or later to actually receive their vehicles. As for everyone else, it remains to be see who will get their cars first. Though in the past, Tesla has suggested its California customers and existing Tesla owners may get preference.
Musk is well aware of this backlog of reservations for the Model 3. It’s part of the reason why the CEO is retooling production and removing some steps of traditional car making. But by the end of July, the CEO said he plans to deliver 30 cars, upping that number to 100 the next month. By September, Tesla plans to deliver 1,500 cars, with 20,000 by December, Musk wrote on Twitter.
The company plans to be building about 500,000 cars in 2018.
The Model 3 is a more affordable version of the Tesla Model S
Musk has described the Tesla Model 3 as “a smaller, more affordable version of Model S with less range and power and fewer features.” He added that the “Model S has more advanced technology.”
While the Model 3 will still be equipped with Tesla’s autopilot system, it won’t have any significant new technology or features. It will also be slightly slower than its predecessor, going from zero to 60 miles per hour in 5.6 seconds, compared to 2.3-4.3 seconds with the Model S.
The Model 3 will be able to drive 215 miles in a single charge.
In terms of size, the Model 3 will be 184.8 inches in length with room for five adults, which is a little less than the five adults and two children that fit in the Model S thanks to its rear-facing seats.
And as for the Tesla Model 3 interior and exterior—well, pictures speak louder than words.
Tesla’s revenue could skyrocket
Tesla reported revenue of $7 billion for the full 2016 year.
Based on Musk’s estimates and Tesla’s most recent report on reservations, the Model 3 alone will result in revenue of about $15.7 billion over the course of the next two years. Granted, those statistics are outdated. The reservation figure is from 2016—suggesting that the revenue from the Model 3 could be even higher than that.
Revenue, however, is not the same as profit. Although it’s unclear exactly how much it will cost Tesla to build a Model 3, UBS projects that for the company to break even, Tesla will have to raise the price of the Model 3 to $41,000.