On the eve of the launch of Tesla Motors’ make-it-or-break-it vehicle, the Model 3, Goldman Sachs says demand for Teslas has peaked. Quite frankly, I was wondering how long it would take until this happened. I should know: I’m signed up for the Tesla Model 3 and have no intention of actually buying it.
My relationship with Tesla didn’t begin on what I’d describe as a positive note. Back in 2013, I was hired to direct a commercial for a beautiful cottage community being built in Point Roberts, Washington. The developer wanted to include a Tesla in the ad, so I found a Model S through a university friend whose brother had just purchased one.
Yes, the car was exquisite on the outside; my crew and I marveled at the look. But none of us were very impressed with what we found on the inside. The leather seats seemed to have a cardboard feel to them, and the trim levels weren’t anything close to what you’d expect for a car with a price tag hovering around $90,000 USD.
But it was the battery that really turned me off. We were driving it a fair bit throughout the day, in a manner that would’ve used up roughly half a tank of gas in a comparable internal combustion-powered vehicle. By the end of the shoot, we were literally crossing our fingers, hoping the car would make it to the charging station so it could drive home. If not, all of us realized we’d have an expensive and useless brick on our hands.
Luckily, it made it. But what followed was a 45-minute wait for the car to have enough of a charge for the relatively short commute back to its owner.
So, my initial impression? Great-looking car on the outside, iffy on the inside, huge battery issues, and an unrealistic price tag. Tesla was an experimental car for wealthy techies.
Fast-forward to March 2016. Tesla CEO Elon Musk announced the Model 3 as, “a mass market, affordable car.” The press declared it as “sexy and fast.” And I decided to take a second look.
With a workable price point of $35,000 USD and a decent range of over 200 miles, maybe this could work for my family of 5? I’ve always hated paying for gas, and trucking kids around to sporting events all over earth’s creation had proven the point: I needed to find a cheaper transportation alternative.
The more I looked into it, the more I liked it. The price was really what sold me. So, a month after the Model 3 was announced, on March 30, 2016, I visited the Tesla website, paid my $1,000 deposit, and was officially in line.
The disillusionment began almost right away.
After visiting “Model 3 Counter” and being told my estimated spot in line was 410,862 with an estimated delivery date of June 2020, I began to question my sanity. Those figures would be later updated to the 203,535th place in line and a delivery date of May 2018—but the damage was done. I would never wait for anything that long, especially after laying down $1,000. If my wife had told me I’d have to wait two-and-a-half years after proposing to her, I think I would’ve ditched her. So, why should a car be any different?
My serious questions began in the fall of 2016 when Mercedes announced the Mercedes EQ, the German carmaker’s electric SUV concept vehicle. The company said it would have a range up to 310 miles, a price point of around $40,000 USD, and cars rolling off the assembling line in 2019.
I owned a 1992 Mercedes 500SL AMG when I was younger. It was the most incredible car ever—so I could only imagine how solid the EQ would be.
The Mercedes EQ, coupled with the rave reviews and relatively inexpensive price tags of the Nissan LEAF and Chevrolet Bolt, began to change my opinion about waiting for the Model 3.
But it was when I took a look at the market data for Tesla Motors (NASDAQ: TSLA) that I changed my mind completely.
Up until a few days ago, Tesla was the most valuable carmaker in America with a higher market capitalization than the Big 3: Ford, General Motors, and Chrysler! For a company that churned out a measly 47,000 cars in the first half of 2017, something doesn’t add up. By comparison, Ford sold over 234,000 vehicles in March 2017 ALONE!
Yes, based on the paid registrations (400,000 according to Forbes), so far the Model 3 has been an incredible success. But for people like me—cost-conscious consumers looking for real value—the Model 3 likely won’t deliver. As more and more automakers make electric vehicles, I keep coming back to the same question: How is Tesla going to compete? When the Model 3 was announced, Tesla was the only legitimate EV manufacturer in the world. Now they’re up against everybody: Mercedes, Ford, GM, Honda, Nissan, Toyota, etc.
I’m not interested in gambling money on what ultimately turns out to be another DeLorean.
Yes, I’m signed up for the Model 3. But when it comes time to actually purchase it, I’ll be taking my $1,000 deposit back and heading to a Mercedes showroom. I bet I won’t be the only one.