What will happen when a $35K Tesla arrives?

Tesla's Model 3 Will Be Its Best-Selling Car--Despite Musk's Failure To Work Sex Into Name

The all-electric Tesla Model S sedan.

Tesla-watchers and first-adopters alike last week were agog with news that by 2017 the electric automaker will make a new electric sedan named the Model 3.

The Model 3 will actually be Tesla’s fourth-ever model line (that’s if you count the tiny Roadster and the forthcoming Model X SUV) but the company considers the 3 its third-generation vehicle because the S and X are built on the same platform.

Which brings up an interesting point of note: Founder Elon Musk had cleverly wanted to name this car the E, so that the acrostic of his models could spell S-E-X. Ford, alas, didn’t take to Musk’s style of humor and, according to him, threatened to sue Tesla over naming rights. Apparently Ford thought the name was too close to its naming scheme for the admittedly important-to-automotive-history Model A and Model T.

“Ford tried to kill sex,” Musk joked at Tesla’s 2014 annual shareholder meeting.

It may have killed SEX this time but I have a feeling the Model 3 (S3X isn’t too far off, come to think it) will catapult Tesla into mainstream car culture in a sudden, historic and irreversible way when it debuts. All told, Tesla sold more than 22,000 Model S cars in 2013, a number that will pale in comparison to what it can do with the Model 3.

For starters, it’s cheap—$35,000 is inexpensive for an electric car and for any car made by what I’d consider a luxury brand. To combine both—a green power train with creature comforts often reserved for Porsche or Audi —for less than $40,000 will prove a major breakthrough in both the automotive and technology industries. Most of that savings is due to improved economies of scale enabled by Tesla’s planned $5 billion Gigafactory, which will reduce the cost of its battery packs by an estimated 30 percent. In fact, Musk says, by 2020 Tesla will be shipping 500,000 cars a year—10 times the nearly 20,000 it put out last year.

Furthermore, the Model 3 is a manageable size. It sits in the sweet spot between hulking sedan (think Mercedes-Benz S Class) and sport sedan (think BMW 1-Series). It’ll come in roughly 20% shorter than the Model S and gain extended range from the weight savings gained—200 miles to a charge is the estimate—while going head-to-head with something like the size of, say, the handsome BMW 3-Series. That suits the American buying demographic perfectly, because while crossover sales are still growing the quickest of any model size, sales of midsize sedans remain a strong and ever-present constant.

That athletic BMW brings up my third point—the Model 3 dutifully maintains the good-looks precedent set by the Model  S, which is no small thing to today’s intensely image-conscious consumers. It’s telling that Model S sales are coming at the expense of BMW, Mercedes, Lexus and Porsche: In the first half of last year California alone saw more than 4,700 Model S registrations, and nationally Tesla matched total combined sales of the Lexus LS, Audi A8 and Porsche Panamera . Indeed, it’s telling that Model S competitors are fancy whips from historic brands, not other green energy cars like the Toyota Prius, Chevy Volt or Nissan LEAF.

In stark contrast to the Prius, the Model S is proving that alternative-fuel cars can look just as sexy as sports cars. Should look just as sexy as sports cars.

Even if they don’t actually spell out the word.


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