NEW YORK • Tesla Motors' Model 3 unveiling was its iPhone moment: More than 325,000 orders have been placed for the car, unseen by most of the would-be buyers, including thousands who stood in long lines or camped out overnight at stores.
For billionaire chief executive Elon Musk, who has aspirations of his electric-car company becoming as big as Apple, it was a ringing endorsement.
But when people camp out at an Apple store, they typically walk away with a new phone. The lines of people snaking around Tesla outlets were merely placing US$1,000 (S$1,350) deposits for a Model 3 - a car Tesla will not even start shipping until late next year. Though perhaps that timing will change: Mr Musk tweeted last Saturday that the company is "focused on accelerating the ramp", based on the blockbuster demand.
For now, the orders give Tesla an infusion of cash to ramp up manufacturing, as well as a show of enthusiasm for the company's lessexpensive car, which is intended to spread the adoption of electric vehicles and lift the youngest publicly traded American carmaker to profitability. Tesla shares jumped last Friday, while other carmakers' fell in the wake of disappointing new-vehicle sales in the United States last month.
The US$35,000 Model 3 will have a minimum 346km range and Mr Musk said he is "fairly confident" that deliveries will begin next year. Tesla received more than 115,000 reservations in 24 hours, he said last Thursday. Last Saturday, he tweeted that orders had reached 253,000. "We have an amazing product. I think you'll be blown away," the 44-year-old said last Thursday. "You will not be able to buy a better car for US$35,000, or even close. It's a really good car, even with no options."
The Model 3 is the linchpin of Tesla's plan to reach beyond the most affluent buyers and make electric vehicles a significant part of the market. Much of the car's platform is new, including the battery architecture and motor technology.
"Tesla has changed the game again," said Ms Andrea James, an analyst with Dougherty & Co. "In one day, Tesla generated at least 150,000-plus reservations, representing an order book of US$6 billion in revenue and generating US$150 million in zero-cost capital from the US$1,000 customer deposits."
Mr Musk suggested last year that if Tesla continued to grow by 50 per cent a year for 10 years, generating a 10 per cent profit margin and garnering a price-to-earnings ratio of 20, it would be valued at about the same US$700 billion Apple was worth then. The number of Model 3 reservations exceeded analysts' estimates and is more than double the roughly 107,000 vehicles Tesla has sold to date.
At US$1,000 each, the deposits would infuse the company's coffers with about US$325 million. While the reservations are refundable, the outpouring suggests there will be plenty of demand for the company to work through once production gets under way.
Tesla's challenge will be to produce the cars quickly enough and well enough. The company aims to make 500,000 vehicles a year by 2020 and is counting on its battery factory under construction near Reno, Nevada, to further drive down costs. Tesla's Fremont, California factory can accommodate the assembly of 500,000 cars, said the company, which has yet to master manufacturing in high volumes.
The Model 3 is the Palo Alto- based company's fourth car after the Roadster, Model S sedan and Model X sport utility vehicle. The Model X was unveiled in February 2012, with delays pushing back initial deliveries to customers until September last year.
Hardware for Tesla's autopilot features will be standard and the four-door sedan will seat five adults. Design features include one large, continuous piece of glass for the rear roof area to enhance visibility. Tesla said it plans to double the number of its supercharger stations by the end of next year. Customers in new markets, including Brazil, India, Singapore and Mr Musk's native South Africa, were among those able to place orders online last Thursday.
While the Model 3's base price still makes it a luxury model, it is not nearly the financial stretch for consumers as the US$75,000and-above Model S.
"I've been waiting to buy an electric car for 10 years," said Mr Mark Dilsizian, a doctoral student at New Jersey's Rutgers University who also runs a software start-up, last Thursday. "It's safer, it's greener, it's better performing, it's better designed."