Tesla's Model 3 Garnered Massive Reservations

The high demand of Model 3 can provide huge growth to Tesla Motors

Tesla Motors Inc.’s recently launched prototype, Model 3 electric car garnered massive 276,000 reservations in mere 72 hours since March 31.

The impressive figures indicate the future advancement for the automaker and electric cars. CEO Elon Musk updated through his Twitter account about the reservations received by the company by the end of Saturday. The Model 3 prototype was debuted on Thursday’s evening but it is not expected to come out any time before late 2017.

The compact luxury electric car has the capacity of five seating and has a mileage of around 215 miles on a charge and going of 0-60 mph in less than 6 seconds. The vehicle has a starting price of $35,000 but since Tesla sets price on its vehicle in “tiers” therefore the Model 3 may be sold at an average price of $42,000 depending on the options’ inclusion by the consumers, according to Musk’s estimates.

The overwhelmed CEO has also announced that as a token of appreciation the company has planned to send gifts to people who waited in queue at Tesla stores.

The colossal number of reservations has financially been transferred into $11.6 billion backlog of orders. In the previous year, the Palo Alto, Calif. firm’s global revenues amounted to be around $4 billion. Additionally, the automaker giant has earlier specified its goals of reaching the annual production tenfold to 500,000 by the year 2020.

But, for the analysts, the high level of demand has never been the question. However, the concern is whether the company will be able to efficiently produce and supply the cars accordingly. The automobile now has 20 months to ramp up its production while simultaneously struggling with hefty cash outflows and quarterly losses. To date, the Californian EV maker has shipped mere 110,000 vehicles most of which comprise of Model S sedans. Also, the company has showcased slow performance while producing its sport utility vehicle Model X that was launched last year. Therefore, the high number of demand might turn out well for the company’s business or it might add more complexities for the company to perform in an already saturated market.

Earlier, Tesla Motors had strong holding in the electric car market however since the established manufacturers came out to produce the electric cars the company was left facing strong competition. The key rival, General Motors is producing Chevrolet Bolt EV which is likely to hit the road late this year. Moreover, the vehicle has a starting price of $35,000.

Additionally, redesigned BMW’s i3 and Nissan Leaf are due late next year. However, if the Tesla can make enough cars then it is likely to outsell America’s best-selling BMW 3 series compact luxury sedans. The production of Model 3 ought to correspond with the operation of the auto-tech giant’s giant battery factory, named “gigafactory” by the CEO. The production plant will manufacture the batteries pivotal for Model 3. Also, the company has to prudently set the price for the batteries which can help in keeping the price of the vehicles affordable.

After the launch of the prototype, Tesla’s stock performed quite well at the market which closed down on Friday. It went up by 8% and closed at $237.59. Also, during after-hours trading, the stock jumped up massive 10% and closed at $247.10.