This past week was unprecedented in the history of the automobile. Tesla Motors began accepting orders on the Model 3. In three days, they took some 300,000 reservations for the car, each with a $1,000 deposit. If they all come through, that equates to over $10 billion in sales–in three days. For perspective, the Toyota Camry, the best-selling car in the country, sold about 430,000 units for all of 2015. Thousands stood in line for hours at Tesla stores around the world, including more than a few of us at Plug In America.
This feat was a tremendous accomplishment for Tesla and a tribute to the enormous power of the brand that Elon Musk and his team have built. But it was also an indicator of the excitement around the electric car, the sense that it is going mainstream, and an early indicator of the market transformation that we believe is coming.
Studies have suggested that a battery range of 200 miles is about the point where most people stop worrying about range and demand moves from early adopters into the broader market. The opening of reservations for the Tesla Model 3 has been the first true test of what the demand might be for a moderately priced car with a 200 mile range. In fact, demand turns out to be vastly larger than anyone had previously imagined.
While certainly a great success for Tesla, this incredible sales event should also give comfort to Carlos Ghosn of Nissan, Mary Barra of General Motors, and other automakers who are boldly investing billions of dollars into building the new generation of 200 mile range electric vehicles–and wondering whether the demand for the cars is really there. Well, it’s there. It turns out that this is a very big sandbox and there is plenty of room for everyone to play.
The fact that Tesla uncovered such extraordinary demand for a vehicle that is still years from delivery suggests that there is plenty of room for others to succeed as well. People have diverse needs and lifestyles. Just as there are many different gasoline cars that are successful in meeting the varying needs of a variety of consumers, there is every reason to believe that there will be a number of successful electric vehicles meeting various needs in this newly developing market, driven by the biggest change in automobile technology since the Model T.
Photo Credit: Leslie R in San Diego waits in hours-long line to pre-order the Tesla Model 3. Tesla Motors received more than 250,000 pre-orders within 72 hours of the vehicle’s unveiling.