Tesla, BMW locked in yuppie car showdown

Yahoo Finance

Last Night, Elon Musk and Tesla Motors (TSLA) announced its long rumored third generation model would come out in 2017. Dubbed the Model III, it's smaller than the Model S and aimed squarely at the BMW 3-series.

The Model III is rumored to be priced at the all-important $35,000 base sticker. At this price Tesla Motors is shooting for big game here, where the Audi A4s, Mercedes C-classes, as well as the aforementioned 3-series battle for sport-luxury car supremacy.

While the announcement of a ‘Tesla for the rest of us’ is welcome news, whether this is a gamechanger for Tesla Motors remains to be seen.

“Tesla’s marking their turf here,” explains Jeff Macke in the attached video. “They’ve got their Model X coming out prior to this, which is an SUV-crossover type of thing. That’ll make a bigger mark on the market as a whole, but this is their attempt to go mainstream.”

In Macke’s mind, the $35,000 price range really is the automotive “holy grail” for electric cars. “Tesla is still a very niche-y little play, a tiny little luxury car concept basically,” he says. “Everyone’s still jockeying for position in this market, it’s obviously not penetrated at all, is this going to be the thing that pushed them over the top? I don’t know.”

Another big question is whether consumers will be able to let go of range anxiety in exchange for the coolness of a potential sub-$40,000 Tesla. However as Macke astutely explains about the consumer psyche, “it can’t be about cool or range anxiety, these are not iPods, it’s a car.” To go mainstream you need to have the utility of a car, and Macke believes Tesla Motors is on the right track by now offering a suite of products that can target any number of consumers, as well providing very car-like features. And let’s not forget about Musk’s aggressive plans for a network of “supercharger” stations from coast to coast, along with the concurrent creation of high-voltage chargers that are popping up around the country, which will likely quell any range concerns.

As for whether Macke will buy the Model III, he’s got his heart set on the purchasing the cross-over Model X instead. With a range of products soon on the way for every type of consumer, the mainstreaming of Tesla Motors is almost here.

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