Tuesday, March 29, 2016

After the Tesla Model 3 Launches This Week, the World Will Know If Elon Musk Called the Electric-Car Future Correctly

It's time.	(Credit: Reuters/Bobby Yip) Click to Enlarge.
It is Elon Musk’s moment of truth.

Over the last dozen years, the serial entrepreneur and inventor has built a buzzing fervor from Wall Street to Silicon Valley by accomplishing the improbable—erecting a globe-spanning automobile company from scratch.  His Tesla Motors is the only such success in at least a half-century.  In that time, scores of auto making ventures with global ambition have brightly launched, only to stall, fail, and, in the best cases, get picked over at pennies on the dollar.  Tesla is still going, though, stylishly and single-handedly validating the commerciality of electric cars along the way.

Only, this achievement isn’t what drove Musk into autos.  Back in 2004, when he became Tesla’s primary investor and chairman, his objective wasn’t to build cool cars, or even cool electric cars.  It was to trigger the birth of a new, mainstream industry—to bring electric cars to the masses.  Musk saw and continues to see electrics as a crucial part of a solution to climate change.

Despite being chronically late to deliver his cars, Musk has attracted a fanatical base of owners: mainly rich, green-minded clients who wish to make a statement, whether politically, aesthetically, or both.  It’s a decidedly limited group.  Last year, Tesla sold about 51,000 cars.  Musk hopes to deliver another 93,000 vehicles this year, which, while an impressive jump, isn’t quite there if you’re thinking like a big car maker:  It would equal a mere 4% of the approximately 1.9 million cars sold in 2015 by both BMW and Mercedes, elegant brands that Musk regards as his true competition.  It is not an industry, and Musk knows it.

On March 31, Musk will finally unveil the car that he has always promised—the mass-market vehicle meant to be the big-bang for electrics.  It’s the Model 3, a $35,000 sedan that will go at least 200 miles on a single charge.  The positioning is deliberate—at half the base price of his two luxury models, it’s around the average cost for new cars in the US; and the distance is thought sufficient to alleviate most cases of so-called range anxiety, the fear of becoming stranded with a dead battery.

Although Tesla has maintained tight secrecy around the car, predictions call for the Model 3 to be crammed with technology including autonomous functionality, and to feature Musk’s usual exquisite styling.  Mind you, this week’s debut is only a showing of the car—he is promising to actually deliver it late next year.  If past is teacher, the first batch of Model 3 cars aren’t likely to reach our roads until 2019.  But he will be accepting reservations for them right away.

The stakes are the highest ever for Musk.  If motorists buy the Model 3 in the hundreds of thousands, he will have delivered on his vow to make an electric for the general public.  The consequences of all this turning out well could be considerable profit for Musk and his investors, not to mention a new upheaval in geopolitics.  If electrics become the norm for autos, then the future appetite for oil will be far less than forecast—and a softer bout of climate change perhaps is in the offing.

Read more at After the Tesla Model 3 Launches This Week, the World Will Know If Elon Musk Called the Electric-Car Future Correctly

No comments:

Post a Comment