Last week’s reveal of the highly anticipated Tesla Model 3 has led to more than 325,000 reservations and counting. That’s more the double the number of ALL electric car sales in 2015. Tesla says, “In the first 24 hours Model 3 received over 180,000 reservations, setting the record for the highest single-day sales of any product of any kind ever in world history.” Not just cars – anything, ever. Even Elon Musk himself is astounded by the interest and popularity of his electric car for the masses. But what many have forgotten about in all the Tesla hype is a similar electric car that’s also coming out soon – the Chevy Bolt.
Both cars claim a starting price in the mid $30,000 range before tax credits, making them far more accessible than the $100,000 Model S. More importantly, both cars claim a range of over 200 miles. This is the magic number that seems to cure most people’s range anxiety, and is similar to the range some conventional cars get out of a tank of gas. That’s why cars like the Nissan Leaf, with half as much range, don’t measure up to the Model 3 and the Bolt, despite being less expensive.
So why haven’t 325,000 people lined up at their local Chevy dealers to plunk down a deposit on a Bolt? After all, it’s coming from a well established auto manufacturer rather than an eccentric startup, and deliveries will begin late this year, a full year ahead of Tesla’s promised “late 2017” first deliveries. People far down Tesla’s list may even end up getting their cars a year or two after that, as production struggles to catch up with demand. I trust the Chevy to come out pretty much on schedule, but Tesla less so. That’s not entirely their fault, either, partly because they are victims of their own success.
Much of Tesla’s success is in what differentiates them from the major brands like Chevrolet – the direct sales model, for example. I don’t know anyone who actually enjoys the traditional dealership experience. I think the main reason the dealer franchise system as we know it still exists is because it’s mandated by law. How else could dealers stay in business with the shady practices some of them follow? Conversely, I’ve never heard of anyone having a bad experience at a Tesla store. Even joyriders who can’t possibly afford a Model S have been treated well and given test drives in a P90D. I can’t imagine any Chevy dealer letting me come in off the street to take out a Corvette Z06 just for fun.
The biggest difference, though, is the image of each company. Chevy is… well, Chevrolet, the most mainstream brand of General Motors. It doesn’t get any more big business than that. Tesla, on the other hand, is a small upstart that established themselves with a luxury car, the Model S. It was a revolutionary idea to build a full electric luxury car rather than an economy minded electric penalty box. The Model S is properly luxurious, and properly fast. If GM were to build an equivalent car, it would probably be branded as a Cadillac. But Cadillac couldn’t put their name or badge on a car for the masses without compromising the historical exclusivity of their brand. GM executives have learned from their Cimarron mistake of the 1980s. Tesla, on the other hand, has no historical exclusivity to uphold. Being so new, they are free to invent themselves any way they want. While a Bolt with a Cadillac badge would end up becoming the next Cimarron fiasco, the Tesla brand works in favor of, rather than against, the Model 3. People perceive the excellence of more expensive Teslas trickling down to the Model 3, and now anyone can have a part of it. It was a brilliant marketing plan, and it worked perfectly.
But Chevy has already started to fight back. I was scrolling through my Twitter feed early this morning and saw this.
— Chevrolet (@chevrolet) March 30, 2016
“Short wait.” If that’s not an intentional dig at Tesla’s timeline, I don’t know what is. Chevy is actively trying to poach Tesla’s potential Model 3 customers with promises that the Bolt will be available first. Many people, including some personal friends of mine, have said that despite their interest in Tesla, there’s no way they would have put down the $1,000 deposit on a Model 3 if it wasn’t completely refundable. Chevy doesn’t have to resort to such measures because they’re already a well established company, and no one doubts their ability to produce the Bolt. Ironically, the mainstream qualities that turn many Tesla buyers off from Chevy are the same qualities that will ensure that the Bolt is everything they promise it will be. I wonder how many of those 325,000 Tesla deposits will be withdrawn to purchase a Bolt instead. Once a company sells 200,000 electric cars, the $7,500 federal tax credit for electric cars from that manufacturer begins to decrease. People near the end of Tesla’s line may want to jump to one of the first 200,000 Bolts to get that savings, not to mention an actual car sometime this decade.
Whether Tesla is successful or not at producing an affordable electric car for the masses or not, what they have done successfully is spark (pun fully intended) widespread interest in electric cars. The Chevy Bolt will probably sell better because of the Model 3. Nissan CEO Carlos Ghosn is thrilled about the Model 3’s success. “The fact that so many people are willing to pay a down payment to get this car which becomes available at the end of 2017 is a good sign,” Ghosn said. “Finally, good competition for EVs is picking up.” This is despite the current Nissan Leaf lagging far behind the Bolt and Model 3 in range and amenities. But Nissan has big plans for electric and hybrid drivetrains in future models. Expect the next generation Leaf to come out swinging hard at the Bolt and Model 3, as well as electric versions of more mainstream cars from Volkswagen, BMW, Ford, and others.
As for Tesla, even if they end up disappointing people and fading away into obscurity, they will have still succeeded in one of Elon Musk’s primary goals from the beginning of the company. Not only have they brought electric motoring into the 21st century, they’ve brought it into the mainstream. Whether Tesla’s cars succeed or fail, the company itself has already won.