Today, Tesla's (NASDAQ:TSLA) vehicles can only be bought for $70,000 or more. But it's always been the electric-car maker's mission to use the sales of its higher-end, lower-volume vehicles to fund its path to building a more affordable, higher-volume car, which Tesla says it will unveil for the first time next month. But don't expect much more than a look.
A slow, coy unveiling
Tesla is still on track to unveil its first lower-cost car, which it is calling the Model 3, by the "end of March," CEO Elon Musk said in a recent visit to a Tesla location in France when asked when the company would first show pictures of the important vehicle.
But Tesla may only show a basic look at the vehicle when it is unveiled in March, Musk suggested. "I'm being a little coy here," he explained. "We're not going to show everything about Model 3 until a lot closer to production time." This wouldn't be the first time Tesla unveiled a vehicle this way. Leading up to the Model X launch, a range of key details were left out until the company began delivering the car to customers.
Some impact Model X features that weren't revealed until the last minute included:
- Free lifetime access to Tesla's Supercharger network included with purchase.
- The SUV included the world's largest-production windshield, which extended from the front to where the rear, falcon-wing doors begin.
- The double-hinged falcon-wing doors sported capacitive, inductive, and ultrasonic sensors to monitor their surroundings so they could open in custom arches each time in order to avoid obstacles to the side and above.
- The front doors could automatically open and close.
- An all-glass roof came standard.
Tesla's "coy" unveiling of the Model 3 mirrors the its historical strategy of balancing between both encouraging competition and shrouding its vehicle development in secrecy. The company encourages competition by sharing its patents and offering to share its Supercharger network with any manufacturer who will build a car that can handle the charge and also pay its share of operating expenses. But, at the same time, it is also fiercely competitive, choosing to hold back key information about future products.
Expect preorders to start
The company's Model 3 unveil will likely be revealing enough for Tesla to begin generating demand for the vehicle. It has said it will begin taking preorders for the vehicle when it unveils it in March. Burning cash as Model X development costs peak during the fourth quarter, preorders for Model 3 can help give cash flow a lift.
The timeline for Model 3 is critical for the company. It is slated for first deliveries to begin by the end of 2017, according to Tesla. But it has emphasized that its currently under-construction Gigafactory, which management says is ahead of its initial schedule for construction and battery production, is critical to a successful Model 3 launch. Without the battery factory, Tesla could run into battery production constraints and risk having Model 3 body production ready but not the necessary battery production volume to support demand.
Daniel Sparks owns shares of Tesla Motors. The Motley Fool owns shares of and recommends Tesla Motors. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.