Model 3 is Tesla’s first mass-market car

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Model 3 is Tesla's first mass-market vehicle, and it represents a significant step forward for the industry in terms of mass manufacturing of electric vehicles. Similarly to other models on the market, the car's initial price of $35, 000 could rapidly increase with options (Richard, Schneider, Trines and Wagner 2001). This paper discusses the car's improved capabilities. The vehicle was designed with crash avoidance and automatic emergency braking in mind, based on Tesla's confidence in fully autonomous driving. The Model 3 strengthens Tesla's role as a global leader in electric vehicle manufacturing. The ingenuity and vision at Tesla is geared towards electric vehicles using battery powered drive.


The initial development of the car is huge. The consequent cost of production may decline considering the amortization of tooling costs. It is expected that as the total number of sales for the car increase, the base cost will considerably reduce enabling more buyers to make purchases (Nygren, Gustafsson and Tingvall 1985). Increased production will result in spread of the tooling and fixed development costs over numerous units. The determinant factor in the market demands the rate of production that will be adopted and hence the distribution of production costs over numerous units. The initial cost design may cost more as a result of purchase of new equipment and technologies but upon developing such designs repeatedly, the costs may slightly drop.

The Premium package of Tesla Model 3 will be among the determinant factors of its cost. The package includes standard features such as a covered center console and automated adjustment of front seats. The Premium package comes with a tinted glass roof to offer protection against infrared and ultraviolet radiation, two rear USB ports, and LED fog lights (Weiss, Patel, Junginger, Perujo, Bonnel and Grootveld 2012). Additionally, a power adjustment steering is incorporated, an audio system, and open-pore wood trims. Another determinant factor is the enhanced Autopilot feature. The vehicle has been equipped with hardware utilities that will enhance the addition of an Autopilot system of the second-generation. The activation of this feature requires an additional cost to the initial cost involved in the car manufacture (Bakker and Farla 2015). Among the reasons for increased costs in activating the Autopilot feature are the advantages they bring the owner. The car upon activation will be able to park without driver input, change lanes automatically, merge off and on a highway, and depending on the traffic conditions, the car will adjust its speed accordingly. In addition, the Summon feature will enhance the adaptation of the car to a difficult environment such as a garage with tight spaces (Heuer, Miller, Richard, Zerwas, Aguilar-Saavedra, Alcaraz, Ali, Ambrosanio, Andreazza, Andruszkow and Badelek 2001). Among the features being enforced from Model X and Model S are the Auto-steer, forward collision warning, and cruise control. The integration of these features in addition to Autopilot led to the considerable increase in the initial price. The feature enables the car to fully drive without driver input.

The value of extra touches to the car will result in additional costs. Among them include the paint job and 19-inch sport wheel. Additionally, various sizes of batteries are available with different mileage and each comes at an additional cost. The battery in the base Model 3 can accelerate to 60mph in 5.6 seconds and on a single charge drive for 220 miles (Nykvist and Nilsson 2015). The Premium Model with an improved acceleration of 5.1 seconds can steer for 310 miles on a single charge. In addition, Tesla Model 3 has a massive supercharger network with an additional cost. Considerably, fully automated models of other car brands cost as much as a base Model 3. However, the integrated features in Model 3 exist in no other brands. The increased cost of the car may therefore facilitate increased purchases as a result of these features. Safety features on Model 3 such as emergency braking among others is a stand out feature and may thus facilitate families to purchase such a car due to the enhanced level of safety even while driving with their children (Hidrue, Parsons, Kempton and Gardner 2011.). In addition, the car offers keyless entry, a 12-volt power outlet, onboard maps and navigation, voice activated controls, and Wi-Fi and LTE connectivity. Tesla Model 3 is a perfect representation in terms of the paradox of value. In this argument, diesel and petrol cars are essential for travel but electric cars demand higher market values nonetheless.


The combination of 200 miles and the base price are the main selling point for Tesla Model 3. The company has made electric car technology a possibility and therefore with the increased sensitization on green energy, wide markets are available for the technology. However, numerous other brands have launched their electric car models at a comparably affordable price. The Model 3 presents a more affordable way for customers to be part of the installed Autopilot feature which is not available in other brand models. This presents an added advantage for the automaker since the Autopilot technology has numerous advantages such as self-driving, speed control, and emergency braking incorporated. Tesla however faces the challenge of the market running towards sport utilities crossover vehicles and SUVs.


Nykvist, B. and Nilsson, M., 2015. Rapidly falling costs of battery packs for electric vehicles. Nature Climate Change, 5(4), pp.329-332.

Richard, F., Schneider, J.R., Trines, D. and Wagner, A., 2001. TESLA Technical Design Report Part I: Executive Summary. arXiv preprint hep-ph/0106314.

Hidrue, M.K., Parsons, G.R., Kempton, W. and Gardner, M.P., 2011. Willingness to pay for electric vehicles and their attributes. Resource and energy economics, 33(3), pp.686-705.

Nygren, A., Gustafsson, H. and Tingvall, C., 1985. Effects of different types of headrests in rear-end collisions (No. 856023). SAE Technical Paper.

Weiss, M., Patel, M.K., Junginger, M., Perujo, A., Bonnel, P. and van Grootveld, G., 2012. On the electrification of road transport-Learning rates and price forecasts for hybrid-electric and battery-electric vehicles. Energy Policy, 48, pp.374-393.

Heuer, R.D., Miller, D.J., Richard, F., Zerwas, P.M., Aguilar-Saavedra, J.A., Alcaraz, J., Ali, A., Ambrosanio, S., Andreazza, A., Andruszkow, J. and Badelek, B., 2001. TESLA technical design report part III: Physics at an e+ e-linear collider. arXiv preprint hep-ph/0106315.

Bakker, S. and Farla, J., 2015. Electrification of the car–Will the momentum last?: Introduction to the special issue.

November 23, 2022

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