Demand for electric vehicles shows mass-market appeal

High demand for Model 3 shows electric vehicles have mass-market appeal predicting £14Bn in future sales.

Tesla motors has boosted mass market car production due to high levels of demand for Model 3, with the company receiving 325,000 reservations in the first week of taking deposits for the electric vehicle, despite no advertising or paid endorsements.

With future sales estimated at around £14Bn, the introduction of the model 3 is the biggest consumer product launch to date.

Tesla said it had seen demand rise not only for the Model 3, but across all its models.

Tesla Motors says it is on track to produce 80,000 to 90,000 electric vehicles this year, and 500,000 vehicles in 2018, two years earlier than expected in order to meet the high demand.

The company had been struggling to ramp up production of its cars, including its newest Model X SUV. A shortage of parts for Model X stalled production in January and February.

The electric carmaker reported a first quarter loss of $282m (£195m) up from $154m last year, which was in line with investors’ expectations. However, although orders have risen, some investors are concerned about the cash flow of the company, as the carmaker has yet to make a profit.

The announcement that it was increasing production sent its shares up 4% in after-hours trading.

Deliveries of the Model 3 are expected to hit the market in 2017.

Chief Exectutive of Tesla Motors, Elon Musk said: “Increasing production five-fold over the next two years will be challenging and will likely require some additional capital, but this is our goal.”

 

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