Tesla Unveils $35,000 Model 3 Sedan

The Tesla Model 3 sedan.
Tesla Motors, via Associated Press

After a meteoric rise that made it, at least briefly, the most valuable car company in America, Tesla arrived at a moment of truth on Friday night as it delivered the first of its mass-market sedans to their new owners.

For a decade, the company has been a manufacturer of high-end electric cars in small numbers. But now, Tesla is aiming at much loftier goals. It wants not only to become a large-scale producer in the suddenly crowded field of battery-powered vehicles but also to lure consumers away from mainstream, gasoline-powered automobiles.

Yet Tesla’s expansion comes with a set of risks. It plans to more than quadruple its annual production to more than a half-million vehicles, while still maintaining its image as an enlightened outlier in an industry long dominated by global giants — who are racing to develop electrified vehicles of their own.

Tesla unveiled its new Model 3 sedans, starting at $35,000, in a ceremony on Friday night on the grounds of its sprawling assembly plant and research facility outside San Francisco. To the cheers of hundreds of employees and invited guests, Tesla’s chief executive, Elon Musk, drove onstage in a Model 3 and heralded a new chapter in the company’s growth.

“The whole point of this company was to make a really great, affordable electric car,” said Mr. Musk, a Silicon Valley billionaire and co-founder of Tesla. “And we finally have it.”

The big question is whether Tesla can grow dramatically and still retain its unique cachet.

So far, investors have signaled their confidence in the company’s prospects, propelling Tesla’s stock market value to a level on par with General Motors and Ford, the biggest American automakers.

Industry analysts view the Model 3 introduction as the pivotal event that will either confirm Tesla’s vast potential as a major car company, or define its limits as a niche player in an ultracompetitive industry.

“Elon Musk likes making history, which is good because he’ll have to accomplish several unprecedented feats to pull off a successful Model 3 launch,” said Karl Brauer, an executive with the auto-research firms Kelley Blue Book and Autotrader.

The biggest hurdle is expanding manufacturing capacity in Fremont fast enough to begin satisfying the enormous interest in the new car. About 500,000 people have put down $1,000 deposits since last year to reserve delivery of Model 3s when they are available.

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SOURCE: NY Times, Bill Vlasic