Brennan Zimmer
Mr. Kramer
AP Economics - Insight
8 April 2016
The Launch of the Tesla Model 3
It’s very likely that you’ve heard of the company Tesla and their all electric cars, but you probably don’t see too many of them on the roads. This may have to do with the fact that Tesla is a relatively young company and that its vehicles are more expensive than many other cars. Tesla’s have usually started in at about $80,000; until just two weeks ago. With this being said, many people in the past couldn’t afford such a car, but with the newly release Model 3, Tesla has made a more affordable car to the masses. To be put into more detail, below will discuss what a potential car buyer should expect from the Model 3 in its performance, costs of each Tesla model, and the effects of the Model 3’s sales has on the United States economy.
With the MSRP of $35,000, what should customers expect from Tesla’s Model 3? Likely one would expect features close to other previous models as a respected electric luxury vehicle manufacturer. In response to customer desires, this is exactly what Tesla accomplished. According to Teslamotors.com, it states that the Model 3 will have “215 miles to the charge, go from zero to sixty in less than six seconds, seat five adults, and have autopilot hardware”. Other models such as the Model S and X have very close features, though slightly upgraded over the Model 3 due their higher prices. In a nutshell, Tesla is providing its Model 3 customers with everything the average consumer would want, and more when comparing to other automobile manufacturers.
Next, when it comes purchasing a car, price is generally one of the most important details that needs to be kept into consideration. If a car buyer was looking to purchase a Tesla, they would need about $35,000 which would put them in the category of the new Tesla Model 3 as Tesla’s cheapest car option. After the Tesla Model 3 comes Tesla’s Model S, with a starting price just under $80,000 that can cost as much as $108,000. The last and final model that will be mentioned is the Model X which also starts at about $80,000 and goes up to approximately $115,500 says autoguide.com. Thanks to the Model 3, more Tesla enthusiasts will now be able to own a Tesla.
With the Model 3 being released about two weeks ago, there has already been thousands of reservation orders on the car. To be more exact, there has so far been about “350,000” ordered and the demand is growing (Barnes). These sales are equivalent to “14 billion” in gross sales (Moscaritolo). In order to fulfill these orders, Tesla has over 13,000 employees within the United States states rgj.com. Addionally rgj.com also shows, Telsa economic impact could be almost two billion dollars. This is made up of “6,500 direct factory employees, and 3,000 construction jobs” (Damon). Without doubt, Tesla and the Model 3 are helping the economy while keeping its workers within its United States factories.
In the end, Tesla's Model 3 has become more affordable, while meeting/exceeding its customer's demands and having a positive economic role by ultimately increasing the United States GDP. Tesla has started to build a very good reputation within the automobile industry which was once only covered will traditional gas run vehicles. In Tesla’s small amount of time in business, it has almost made a monopoly in electric automobiles. From the results of the Model 3, it is safe to say that Tesla will be here to stay in the automobile industry and if Tesla numbers continue to grow, it's sure to have a bright future ahead of itself.
Works Cited
Barnes, Noah. “Tesla (TSLA) Model 3 Achieves 325K Reservations in a Week.” Quadrangle Online. Quadrangle Online. 10 Apr. 2016. Web. 10 Apr. 2016.
“2016 Tesla Cars.” AutoGuide.com. VerticalScope Inc. n.d. Web. 8 Apr. 2016.
Moscaritolo, Angela.”Tesla Model 3 Sales: Not Too Shabby.” PC. PC Mag Digital Group, 8 Apr. 2016. Web. 8 Apr. 2016.
Damon, Anjeanette. “Tesla's economic impact for Nevada could be $1.9 billion.” Reno Ganzette-Journal. USA Today Network. 5 Sep. 2014. Web. 8 Apr. 2016.
“Model 3.” Tesla. Tesla Motors. N.d. Web. 8 Apr. 2016.
“Model S.” Tesla. Tesla Motors. N.d. Web. 8 Apr. 2016.
“Model X.” Tesla. Tesla Motors. N.d. Web. 8 Apr. 2016.
With the Model 3, Tesla is offering a lower priced product, effectively producing with a supply curve further to the right than their curve had been for the Model S or X. The new supply curve will intersect the demand curve for teslas at a point further to the right than it had earlier, allowing more tesla enthusiasts to have a Tesla as you said. The quantity demanded at this lower price should be far greater than the quantity previously demanded and that certainly appears to be true with over 350,000 units ordered already, over 3 times the 110,000 or so electric vehicles sold by the entire auto industry the previous year. If Tesla manages to deliver the cars their customers have ordered and fulfill their obligations, they, and the EV industry, certainly seem to have bright futures.
ReplyDeleteThis is very interesting as it shows a possible future to the automobile industry. I looked up a map of charging stations and there appear to be a high number of them located in the south-eastern part of Wisconsin. This is pretty surprising considering major cities in other states have 1 at most. I think the innovation of this cheaper vehicle will be beneficial to the future economy. It is inevitable that resources will continue to be limited. This technology could be useful in countering the loss in other resources. Overall, nice job picking a topic that is very prevalent.
ReplyDeleteWith cars such as the Prius and other hybrids, a future for non-fossil fuel cars seemed doomed. The Prius’ horrible environmental impact from shipping all of the exotic parts for the battery combined with the fact that it costs significantly more than it's non-hybrid counterpart, the Yaris, had turned off many consumers from the aspect of hybrids and electrics. Cars that enthusiasts can enjoy (mainly in the name of horsepower and/or luxury) such as the Tesla or the BMW i8, I believe will pave the way for alternative fueled cars in the future.
ReplyDeleteMaking the Model 3 more affordable was a smart move by Tesla because previous Models such as the Model S and Model X were to expensive and not many people wanted to spend a fortune on them. Now that Tesla has manufactured a less expensive version with the Model 3, more people will be interested in buying them. This will bring more money in to Tesla. We could see a rise in EV cars in the future thanks to Tesla's Model 3 car.
ReplyDeleteThe Tesla company has definitely made a name for itself over the past 5 years. These luxurious, economic friendly, and fast electric cars are what seems to be everyone’s dream car. Now of course the Model S being at $80,000, not very many people can afford this. The new Model 3 is going to have so many sales that Tesla will be forced to increase production, and fast. Having a nice looking electric car for $35,000 is ridiculously low. A Toyota Prius, being as ugly as it is goes for $28,000 on the low end. I feel that we will be seeing 2-3 times more the amount of Tesla’s on the road, along with charging stations in nearby areas. I will most definitely own a Tesla someday, especially for money like that.
ReplyDeleteI’v heard about the Model 3 before and It’s definitely is attracting many buyers, the thing many people don't know is a potential cost with a Tesla where if their battery dies your car becomes a brick, you have to buy a new battery and that costs at least 20 thousand dollars. You also have to take in account where you can charge the cars. All these things will help the GDP of the country, Tesla making new cars, new batteries and very soon there will be new charging stations with the rapid increase of electric cars.
ReplyDeleteMaking the Model 3 is a great mover for Tesla they are going to generate a large amount of money from making a cheaper car that more of the middle class can afford. I think they do have a future in changing cars and what they are ran with, but as of right now I don't think they will see a huge jump like they hope to see, due to fact that it can only go 215 miles on a charge and there are not many changing stations in smaller cities and states, but other than that great job.
ReplyDeleteOne great thing that Tesla is now doing is providing cars to everyone. Before the model 3 was an option many people couldn't afford this type of car due to its high cost. By offering a lower cost this car will be able to sell to more people. I believe that Tesla is doing a great thing by offering its product to more people. Because of this Tesla will need to work on making sure that they have enough supply to fulfill these new needs.
ReplyDeleteThe biggest thing that makes Tesla great is that they're all electric so the owners don't have to worry about getting gas or paying for it. That's a huge factor to why people are liking them more because of the fact that they don't have to worry about going out to buy gas when they can just plug it in in their garage and charge it over night. The down side to it is the cost. From it being all electric, it's more expensive to buy and own a Tesla, but with the Model 3, the price is going down which means more people can afford them.
ReplyDeleteI find it interesting that so many people want electric cars. Now, having said that, I think Tesla is doing an excellent job. Their cars are very streamlined, and that fact that they’re making them more affordable is really neat. However, it seems like owning an electric car would a quite a bit of a hassle because of its need to charge instead of refuel. Refueling is quicker, and there are more gas stations with fuel than fuel AND charging stations. In the future however, I think that electric cars may become the main mode of transportation for most Americans as the technology improves and becomes cheaper. But for the time being, I think Tesla may have a long road ahead of them before they hit the real pay-off.
ReplyDelete- Martin Mueller
This is such an interesting topic to talk about since it's the news topic everyone's been talking about, electric cars. It interesting on how they are going to create a model in which the middle class can afford rather than aiming towards the high class. In which this is going to draw in more customers in which they can finally get an affordable electric car. In which they can drive at a cheaper cost in which electricity is cheaper and also can help with sustainability. And what also is awesome is that not only with the Tesla Model 3 be affordable but also be another option for consumers in which the car can go from zero to sixty in less than six seconds and can have a range of 215 miles. The only thing that poses a threat are people who travel farther but what is popping up more is electric charging stations as I've notices like in sun prairie outlet mall.
ReplyDelete