Model 3 Update: Owners' Benefits Are Tesla's Risks

Model 3 Update: Owners' Benefits Are Tesla's Risks
The Model 3 is Tesla’s first official foray into the world of affordable electric car. But while this is a good thing for the public, it might not be the best for the company. Photo : Motor Trend Channel/YouTube

Elon Musk never made it a secret that he wanted to create an electric car that was affordable and therefore attainable by the general population. So when Tesla announced the Model 3, an affordable electric alternative, hundreds of thousands signed up to reserve their own unit. The company is not shortchanging the public but is increasing its risks in doing so.

As Learn Bonds reports, the Model 3 is just as safe as the company currently available models despite only costing about US$30,000. Tesla has altered its technology without sacrificing much of it, which is how the upcoming sedan is both affordable and still top of the line. However, it is possible that the company's gamble will not be beneficial for itself.

The publication goes on to state that Tesla's Autopilot 2.0 technology will be available in the Model 3. This means as much as 8 cameras - 3 of which are front facing - 360-degree visibility, a 250-meter range, 12 ultrasonic sensors powerful processing speeds and a front facing radar. All in all, a level 5 on autonomy.

Moreover, Musk confirmed in September that Tesla has made the technology even better, largely because it has made better use of the radar. By pushing it to the front of the vehicle, it is made more effective as its capacity to detect objects are heightened. This then allows the system to better identify objects and make more informed decisions about breaking.

Technology this advanced is no light and inexpensive matter. Musk himself confirmed that it took Tesla a significant amount of effort to put it together. And yet the same will be available and installed for the Model 3, which costs a fraction of what the Model S and Model X retail for.

Which is why Business Insider has questioned if Tesla can even afford to offer the Model 3 as it is. The publication argues that it will be difficult for the company to make a profit on the unit, which explains why the Model S and Model X are expensive luxury vehicles. As the company has previously affirmed, costs will be cut because of better battery technology and demand for the unit is undoubtedly higher than that of its predecessors.

Tesla's CFO, Jason Wheeler, offered a more in-depth explanation as to why the company was willing to take this large a risk. He confirmed that the company is expecting a continued decrease in costs both in terms of engineering and on the commercial side of things. Apparently, it has partnered with a supplier that is excited about the Model 3, which allowed Tesla to lower costs. Moreover, Wheeler confirmed that labor hours are now generally positive.

The Model 3, which is US$30,000 once tax breaks and credits are applied, will run over 200 miles on a single full charge. However, Tesla has made it clear that it will be charging fees for its Supercharge services, which can be charged either by kWh or charging time - depending on the state or country. More than 400,000 individuals have already signed up and made a downpayment for their own unit.

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