LOS ANGELES — Demand for Tesla Motors’ lower-priced electric car surprised even the company’s CEO Friday as 198,000 people plunked down $1,000 deposits.
“Definitely going to need to rethink production planning,” CEO Elon Musk said on his Twitter feed.
Tesla Motors Co. had secured about 135,000 reservations on Thursday, the first day of ordering for the Model 3, with initial demand for an electric car that won’t go on sale for at least another year shattering expectations.
In the Denver metro area, to preorder the Model 3.
The Silicon Valley automaker showed the car for the first time Thursday to a crowd of about 800, made up of Tesla owners, federal regulators and electric-vehicle enthusiasts, packed into a hangar near Los Angeles. One attendee waved a lightsaber, made popular by Star Wars, during a presentation.
Sustained enthusiasm for Tesla’s business model, reinforced by a recent rebound in the company’s stock price, comes even as gasoline prices remain around $2 per gallon in the U.S. Most auto makers have seen cheap fuel prices boost demand for SUVs and pickup trucks, which consume more gasoline.
In a speech, Musk referred to the smaller electric car as the capstone of a “secret master plan” that was crafted years ago to popularize electric cars.
During a test drive for attendees, Tesla Vice President Doug Field said the Model 3 is a once-in-a-lifetime opportunity to make attractive electric vehicles more widely available.
To date, Tesla has sold about 100,000 vehicles — mostly Model S electric sedans with price tags that rival high-end German cars. The Model 3, which has been promised for several years, aims to hit the heart of the “mass market,” Musk said.
He said the car will cost $35,000 and the company aims to have initial copies on roads sometime in 2017. He said the car will be capable of achieving more than 215 miles on a charge, will receive top safety ratings, and will sprint from 0 to 60 miles an hour in less than six seconds.
The Model 3 represents Musk’s steepest challenge. Selling about 50,000 vehicles in 2015, Tesla expects the addition of a cheaper offering to propel annual sales to 500,000 by 2020.
Tesla’s new car will hit the market as its bigger rivals begin to launch cars that could more directly compete. General Motors Co. aims to launch an electric small car later this year, capable of 200 miles on a charge, and Volkswagen AG’s Audi brand is planning an electric sport utility.
Musk lacks the financial firepower of international auto giants, and thanked owners of the pricey Tesla Roadster, Model S sedan and Model X SUV for paving the way for the Model 3.
Rival auto makers have often criticized Musk for having too narrow a market — Teslas often cost far more than $100,000. But the entrepreneur said on Friday that the only way for the relatively small company to achieve the scale, funding and expertise necessary for a more affordable car was to start at the top-end of the market.
He said, “The S and the X are what pay for (Model 3) development … it was only possible to do that before going through the prior steps.”
Analysts and investors see a successful Model 3 launch as a potential way to stanch a long string of financial losses and reverse cash outflows. Product hiccups, substantial increases in head count, the construction of a Nevada battery plant and billions of dollars in research and development costs have dented the bottom line.
Musk realizes things haven’t always gone as planned, but said he wants to hit targets.
“I do feel fairly confident it will be next year,” Musk said. The company has struggled to launch vehicles on time under his watch.
The Associated Press contributed to this report.