A new auto center is emerging. No longer based in Detroit, the newest innovations on the road are rolling out of Palo Alto, California.
Tesla began taking pre-orders their Model 3 this April Fools’ Day. But the sales were no joke. Within 24 hours, Tesla had 276,000 pre-purchase orders, according to an updated CNBC report.
Despite the jump in sales, Tesla still has a few potholes ahead on their road to auto dominance.
The number of pre-orders is not necessarily indicative of the ultimate demand, and with the increase of Model 3s on the road, the question of how to power these cars arises. The company must overcome these issues if they hope to deliver on their promises.
The reservations do not count as an order. Customers will be shipped an actual contract when the production of their car is near, CNBC reported.
Nonetheless, with 276,000 pre-orders, Tesla is currently sitting on close to $11.6 billion in back orders.
The number of back orders is a mental, if not yet financial, victory. By making headlines, Tesla can capitalize on the free publicity, which builds the mob mentality. When people see their peers reserving electric cars, they’re more likely to explore electric cars and ultimately purchase them as well.
While there is a sea of money waiting to be swept up by Tesla, the company has struggled with production issues and maintaining healthy cash flow — the life blood of a functioning corporation.
Assuming a positive outcome, the issue of how to power the 276,000 new cars on the road arises. The electric car market has been steadily growing but without the organized infrastructure gasoline-powered cars enjoy. Forbes reports that the market stared back in 2011 with a measly 17,500 cars sold.
The Electric Drive Transportation Association tracked growth further, showing how plug-in electric car sales flourished though 2014 when they reached 118,000.
Yet Tesla could generate double that total demand in a single day.
With this type of influx of electric cars, charging stations are moved to the forefront of the electric debate.
Currently there are 9,758 charging stations throughout the United States and Canada, reported Climate Change News.
Bloomington had 10 charging stations by 2012, with room for more stations as demand grows.
The average charge for an electric car is about $2. Even with uncommonly low gas prices, the energy charges for an electric car are enticing.
With the added demand sparked from the Model 3 reservations its likely policymakers across the U.S. will put more serious thought and tax dollars into funding electric infrastructure. With more stations, people are more likely to use their electric car more frequently than a traditional car.
With Tesla poised to bring the electric car to the mass market, the grass can be greener on both sides of the road.
wkiepura@indiana.edu
@wkiepura
