On March 31, the automotive industry got a glimpse of what the future may look like as Tesla Motors unveiled its latest pure-electric invention鈥攖he Model 3. Over 325,000 people placed a $1,000 US deposit to get in line to eventually order one of the sleek sedans, with its glass panoramic roof, a base range of 345 kms, and an affordable price starting at just $35,000 US.
Related:
The worldwide rush to place a deposit on Tesla's first mass-market sedan has been astonishing, with , something not seen since the Ford Mustang was first revealed back in 1964. The strangest part? The car鈥檚 late 2017 release date, which could extend into 2018 given Tesla's tardy history in bringing its Model S sedan and Model X SUV to market.
But what does all of this mean for the automotive EV industry as a whole? Is this the beginning of an EV revolution that can create a major impact for the entire automotive community? Or is this a reaction from a tech-based society that has fallen in love with the aura that surrounds Tesla Motors and its brash and risk-taking CEO, Elon Musk?
By the sheer volume of Model 3 reservations, it's evident a demand exists for the Model 3, but automotive sales analyst Timothy Cain believes that other EV manufacturers may not receive a boost from it.
鈥淭here鈥檚 a mystique about Tesla that suggests a comparable product from another manufacturer doesn鈥檛 just hold less appeal鈥攊t holds no appeal. A Tesla Model 3 buyer may not become a Chevrolet Bolt buyer, for instance, if the Model 3 never comes to fruition.鈥�
Related:
Christina Bu, secretary general of the Norwegian EV Association, disagrees and sees the Model 3 buzz as a positive impact towards electric cars as a whole.
鈥淭he Tesla Model 3 will help pave the way for other electric cars, too, like the [Nissan] Leaf, the Bolt and the [BMW] i3. The market is big enough for all of them. The OEMs that have been slow to react and still believe EVs are only for city commuting will soon have a problem.鈥�
鈥淚n the past, traditional car companies to a large extent were developing EVs to comply with political pressure and demands,鈥� continues Bu. 鈥淣ow, with help from companies like Tesla and the soon-to-be launched Model 3, we will soon experience a race in terms of technological development. The EV future will be here much faster than we realize.鈥�
For a global surge in electric cars to occur, not only does the infrastructure have to be in place, but Tesla has to be able to make good on its promises. They cannot be a year late for delivery, as they were with the Model X, or the company is destined to experience a flood of deposit refunds.
The monumental amount of pre-orders means Tesla pockets are flush with $325 million in deposits alone, a number worth about $14 billion in implied future sales. But we have to assume that some of that money will go directly into steadying its current financial burden, assisting current production problems, and fixing issues like the ones behind "the company鈥檚 recent Model X recall."
Related:
"Tesla has been burning through cash, they鈥檝e had quality woes on much lower-volume products鈥攊magine extending that to a high-volume product that enters the mainstream,鈥� adds Cain. 鈥淭he aging Model S and not-as-well-received Model X need to carry the company through for an extended period until the Model 3 arrives, by which time rival automakers could have rapidly advanced.鈥�
Tesla doesn't list its month-to-month sales or regional statistics, but it did make note in a press release that it reached 2,400 Model X deliveries for the first quarter of 2016, pushing its total to 2,908 deliveries since September 2015.
None of those deliveries occurred in Canada, as consumers here that dropped $5,000 on a deposit still have to wait until the summer for their deliveries to start. If Tesla is looking to the gullwing door Model X as their stop-gap measure before the Model 3's arrival, its slowdown in production and subsequent recall might have killed off any steam the once-promising SUV had.
Related:
Based on Tesla's initial goals, the influx of Model 3 deposits couldn't have come at a better time. With that being said, Tesla will need to find a way for sales of the Model X to pick up, which may be a challenge given the buzz surrounding the Model 3 and the high ticket price of $119,000 CDN for the Model X.
These concerns create a gap for the likes of the Bolt, Leaf, i3 and upcoming Hyundai Ioniq electric to fill, a chance for them to take a piece of the electric vehicle pie. But regardless of whether the Model 3 comes in on time or is late on the scene, the rest of the industry feels positive about all the EV talk, broadening the future possibilities in consumer minds.
鈥淲e welcome additional EV options because more electric cars on the road will generate greater awareness and interest,鈥� says Andrew Speaker, director, Nissan EV sales and marketing. 鈥淚n turn, more EVs on the road helps accelerate infrastructure development, which benefits all EV owners.鈥�
A similar sentiment is felt at Hyundai.
鈥淭he Tesla Model 3 doesn鈥檛 have an impact on our marketing strategy; however, if this future model generates more interest for electric vehicles, it can benefit Ioniq, especially if it leads to additional charging stations being built,鈥� said Ken Maisonville, national manager of product strategy for Hyundai Auto Canada Corp.
Related:
Chevrolet may be affected the most from the incoming Tesla Model 3 based simply on the Bolt鈥檚 similar 320 kilometres of range. Tesla and Chevrolet don鈥檛 make for a natural rivalry, but Chevrolet feels they can coexist and that pure electric vehicle competition is healthy for the industry as a whole.
鈥淚t's exciting to see there's demand for the segment, and it tells us that the Bolt is the right vehicle at the right time,鈥� said George Saratlic, lead manager for product brand and technology communication at General Motors of Canada.
Saratlic might play along with the current EV love-fest, but he knows there's a battle going on, and that it鈥檚 one that might just come down to money and timely production.
鈥淲e have 100 years of manufacturing experience to make sure that the Bolt EV will be delivered on time, later this year. From the day we first revealed it as a concept to its full production model showing, everything has been achieved on a tight timeline, and that's just a reflection of how Chevrolet delivers on its promises.鈥�
Even with all this information in hand, it's simply too be early to make any conclusions about the impact of the Model 3 on the automotive industry. A clearer picture will start to form at the end of 2016 when both the Chevrolet Bolt EV and Hyundai Ioniq hit dealerships; a longer-range Nissan Leaf is expected to arrive soon after, too.
Related:
As great as the buzz is around the Model 3, Tesla Motors still has to get their act together and come to market as scheduled with the Model 3 before rivals start turning out products to put the Model 3's range to shame. If something better comes along, at least some of those tech-hungry consumers will show Tesla no loyalty and jump ship after a refund request.
For now, the one thing that's for sure is the heartbeat of the automotive EV landscape appears strong, and that's a testament to the excitement that the Tesla brand brings to the table.
