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Will we remember this moment? The month, the day, the hour Tesla CEO Elon Musk started shipping Tesla Model 3 to the first of a reported 373,000 customers and, perhaps, changed the course of electric vehicles forever?

We might.

“I don’t think there’s any question that this is their most important launch,” said electric vehicle pioneer and consultant Chelsea Sexton.

Sexton, who was part of GM’s ill-fated EV1 team and has worked in and around the electric vehicle (EV) industry for 20 years and admits to having “layers and layers of EV experience” agrees, like most people I spoke to, that Tesla is no ordinary car company. With its aspirational and coveted products and iconic (and somewhat irascible) leader, it’s the “Apple” of the automotive industry.

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“They are like Apple in the sense that they have disrupted the auto industry and forced them faster to move to electronic vehicles,” said Tim Bajarian, a tech industry analyst, who owns the consulting firm Creative Strategies.

When Musk and Tesla start delivering Tesla Model 3’s to pre-order customers later this month, it will mark a turning point for the company. While the new 4-door sedan looks like the luxury sedan Model S, it represents a departure and a clear effort to move down market.

While the Tesla Model S starts at around $72,000 and, with upgrade packages that include the Ludicrous speed boost, a bigger battery for a range of more than 300 miles, and autonomous driving features, most Model S EVs sell for $100,000 or more.

Two out of the three Tesla’s I wrote about in a special series on Tesla Model S drivers, sold for north of $110,00.

The Tesla Model 3 starts at $35,000 and could cost consumers less than $30,000 after tax incentives of up to $7,500.

For that mass-market price, Model 3 buyers accept a more limited driving range of 215 miles per charge and 0-to-60 mph in 6 seconds, as opposed to the body-jolting 3.1 seconds. (Support for autopilot hardware, fast-charging super charging stations, 5-star safety features and seating for five are still included).

It’s unlikely Model 3 customers will notice these small deficits. It’s probably important they don’t.

New EV customers

“This is Tesla’s first and potentially last opportunity to take them out of the purely luxury- and rich person car segment.” said Sexton who knows Musk and has consulted for Tesla (her husband worked for Tesla for 5 years) and virtually every other automotive manufacturer on EV technologies.

Musk’s Model 3, however, enters a crowded field.

There are at least six similarly priced EV vehicles from Ford (Focus Electric), GM (Chevy Bolt EV), Kia Soul EV), BMW (i3), Mercedes (B-Class), and Nissan (Leaf).

Few match the Model 3’s range, but some come close. In fact, the more I looked at the current mid-range EV field, the more I wondered why Tesla’s Model 3 would mark a substantial EV market shift.

These cars all look good and are full featured. It’s true none could match the Model 3’s autonomous driving capabilities, but these are otherwise excellent EV choices.

“The main thing challenging the EV market at the moment is lack of product,” Sexton told me. She explained that, even with an EV car from virtually every major car company, they are incredibly limited in price range, performance and, especially, style options. It’s simply not how people are used to buying cars.

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'This is Tesla’s first and potentially last opportunity to take them out of the purely luxury- and rich person car segment.'

The other issue, and it may be the biggest one, is availability. Some of these EV cars, like the Kia Soul EV, are only sold in California. According to a 2015 study, California currently accounts for 40% of the EV market.

Why California? It’s one of the few states that has an active mandate to put zero-emissions cars on the road, 1.5 million by 2025. By 2018, 10 states could have similar rules on the books.

That doesn’t entirely explain why the limited EV options from major auto manufacturers sometimes feels like lip service.

What does, though, is CAFE or Corporate Average Fuel Economy. This Federal mandate requires an auto manufacturer’s fleet (encompassing all makes and models) has an average fuel economy of 55 mpg by 2025 (President Donald Trump is seeking to roll back these standards). Having an all- electric, long-range, zero-emissions car in the fleet immediately helps balance out trucks and SUVs.

“The vast majority [of these EVs] are ‘compliance cars,’” said Sexton. She contends that auto companies aren’t interested in selling these EVs at volume, just enough of them “to get the carbon credits they need.”

Tesla sells only electric vehicles, so that’s clearly not part of its go-to-market strategy, and the Tesla Model 3 is being sold nationally, two factors that instantly set the Model 3 apart from the competition.

And, of course, there is that undeniable cachet.

That certain something

Every single Elon Musk tweet is analyzed for its significance, especially as it relates to Tesla, current model capabilities and future options. His tweet of the first production Model 3 rolling off the assembly line collected 42,113 retweets and 148,943 likes.

Tesla’s forums are full of die-hard fans discussing the minutiae of the Model 3 and agonizing over delivery dates. Most have already ordered and many are concerned that they won’t see a car until 2018 (which is likely). The first batch of 325,000 Model 3s won't roll off the assembly line at once. It will take months to deliver them all.

“I ordered the Model 3 the day they were available. As an existing Tesla owner, I believe we are pushed to the front of the queue, but we'll see how it all works out,” DragTimesEditor Brooks Weisblat told me via email.

Weisblat and I met a couple of years ago when he was racing Tesla Model S P85Ds. A longtime Tesla fan, he wondered why Tesla was waiting to release the car’s detailed specs, but is fine waiting to learn more until after the launch event later this month.

“I plan to drive the 3 for a while and decide to either keep it, or if I like my Model S better, I will hand the Model 3 over to my Dad who currently drives a BMW i3,” he wrote.

Weisblat seemed comfortable rolling with whatever punches Tesla delivers along the Model 3 production route, but Sexton believes the company may not be so lucky as its more affordable EV opens the floodgates to a new kind of Tesla customer.

“[The Tesla Model 3] takes them out of that camp of people who are simply super fans to ones that will not tolerate things that have happened on recent products,” she said, pointing to recent quality issues with the Model X.

Even though Tesla’s hundreds of thousands of waiting Model 3 customers will want their cars now, Sexton counsels a slow and steady approach for the company. “It would be best to go slow and make sure first customers have a good experience with the product,” she told me.

Plus, if things go sideways for Tesla – quality issues, a scramble to recover, inconsistent delivery and dwindling revenue stream – it could rock the company. Tesla may be worth more than Ford and GM, but it probably doesn’t have the cash cushion to sustain losses the way, say, a GM does with the low-selling Bolt.

The Tesla Model 3 is 'an aspirational example of EVs'

There are, obviously, other risk factors that could sap the momentum out of Tesla’s drive to transform the EV industry. All those Model 3 cars are going to need a lot of fresh batteries. Musk built his own battery manufacturing plant in Nevada, the aptly-named Gigafactory, but it’s not at full capacity. It started making Powerwall home batteries and only recently began producing batteries for the Model 3. That should change by 2018, when the Gigafactory expects to produce enough batteries to supply cells for at least a half a million EVs.

Sexton sees the economies of scale inherent in owning your own battery factory, but has a concern.

“They need to make sure that plant remains flexible as new technologies come down the line,” she said and pointed to Nissan, which recently abandoned its own EV battery manufacturing facilities in favor or newer technology from LG.

What is more likely, though, is that, as the Model 3 does arrive in customers' hands around the country, the EVs generate an intense feeling of FOMO for consumers and car enthusiasts.

Sexton noted that the Tesla Model 3 is “an aspirational example of EVs” and has a cache that the Nissan Leaf and Chevy Bolt simply do not share.

If Tesla can keep up with demand, the Model 3 will mark the end of its EV boutique existence. The car has the potential to create an iPhone-like buzz in the auto market and industry. Its appearance on the road will excite other drivers and its entrance into the market should be cause for concern among other industry players.

“I do see the Tesla Model 3 being a tipping point that will make them more competitive,” Bajarin, the analyst, said, “especially in the mid-price range, but it will also serve as a way to get the major auto dealers to provide similar models and designs to stay competitive themselves.”

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TopicsTeslaElon MuskInnovations