The Enchanting Model 3 by Tesla

Enchanting.  Sexy.  Sleek.  Simple.  Powerful.  These are a few adjectives that come to mind after the unveiling of the Model 3 in Hawthorne, California at 8:30 PST on March 31, 2016 (https://www.teslamotors.com/en_CA/model3).  The much anticipated launch, which in some respects, resembled the unveiling of Apple products, the affordable price, and high-volume car seemed an instant hit not only with the guests present to witness this historic event but with audiences around the globe that watched the live stream via the Tesla website.  It resulted in orders north of 276,000 units within 48 hours!

EM 3 as I like to refer to the Tesla Model 3 (differentiated from BMW’s M3) has a WOW factor of a hundred.  This is because of its looks, functionality, affordability and energy efficiency.  Although, the base model is priced at USD 35,000, Tesla’s CEO, Elon Musk, tweeted about it having an ‘average price of USD 42,000.’  So, I am assuming that the company is expecting consumers to pay at least USD 7,000 in additional options like AWD dual motor, colour upgrade (somebody on Twitter eluded to a matte black choice), roof design (metal, all glass), tow hitch etc. to mention just a few. 

In CAD equivalent terms, the base value totals 45,500 at an exchange rate of 1.30.  This price does not include the incentive programme offered to electric vehicle owners by the Ministry of Transportation in Ontario (http://www.mto.gov.on.ca/english/vehicles/electric/electric-vehicle-incentive-program.shtml).  Although, Tesla’s Model 3 is nowhere to be found on the most recent Electric Vehicle Incentive Programme released on February 10, 2016 for obvious reasons, my hunch is that there would be a rebate of about CAD 6,000 to 13,000 on the MSRP (for instance, the BMW i3 has CAD 13,000).  If this is indeed the case, then the price of the Model 3 comes to about CAD 39,500 considering the lower bound of the incentive.  Of course, there are additional costs involved such as the installation of a charging station which will cost another CAD 1,000 to 2,000. 

However, just to put this price into perspective, I leased a brand new Honda Civic EX in 2006 for $400 per month on a 60 month term and had to pay another CAD 10,000 to buy it out for a total value of $34,000.  In time value of money terms, this would perhaps be equivalent to Tesla’s MSRP less the rebate.  But, in terms of functionality, it will be a lot more than my Civic (which, by the way, I still love to drive) – the autopilot and potential summon/self-drive features alone would make it worthwhile to buy such a vehicle.  Wait until PART 2 of the ‘unveil’ which will occur closer to the delivery date of the Model 3 but, in the meantime, some other advantages [1] include:

i) Lower maintenance costs because of fewer moving parts 20 versus the gas guzzling ones that can contain at least 2,000.  
ii) Auto-steering like ‘spaceship controls’, traffic aware cruise control, lane changing, automated parking, driver warning systems and automated braking functions.
iii) If your Tesla Model 3 has a problem, they are designed in such a way that the data is wirelessly uploaded via the on-board system allowing the team to troubleshoot and fix the problem remotely.  Just imagine saving a trip to the dealership not to mention a charge for ascertaining the problem – a win-win!
iv) Service on a Tesla can also be performed via the Tesla Rangers or the mobile service team in the comfort of your own home. 

Some risks that must be considered prior to buying the Model 3:

Ø   Final price of the vehicle.

Ø   Features, options and corresponding price charts.
Ø   The contour and final design.

All said, this model will mark an inflection point for Tesla because it will give them the requisite sales volume to achieve economies of scale.  To me, personally, Model 3 represents a foray into the unknown.  It represents the beginning of a new end for electric automobiles for the masses.   And, Tesla is the company that will create this future and bring the whole industry forward.

[1]  Some words and phrases were taken from the Tesla financial statements and MD&A.  The ‘spaceship controls’ phrase was taken directly from the tweet of Elon Musk.