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Rory Cellan-Jones: Are electric cars
ready to go on mainstream?

Tesla's Model 3 will determine the company's fortunes

Back in January, I visited the Tesla Design Studio in Hawthorne, California, to interview the firm's founder and chief executive, Elon Musk.

The design team were welcoming, but nervous about what we filmed - and in the background, as we sat down for the interview, were a number of cars draped in black sheets.

One key reason for the secrecy was that Tesla was just a couple of months from unveiling the product on which its entire future now depends. Perhaps the Model 3 was under one of those sheets.

The importance of a car that would reach a wider public was underlined in our interview.

 

Elon Musk explains why Tesla had to make a more affordable car


"Unless there's an affordable car we will only have a small impact on the world," Mr Musk told me.

"We need to make a car that most people can afford in order to have a substantial impact. If we could have made an affordable car straight off the bat we definitely would have, it's just that it takes time to refine the technology."

But building a car that most people can afford is not just about fulfilling Mr Musk's mission to create a more sustainable form of transport.

The Model S and Model X have won rave reviews and are credited with transforming attitudes in the motor industry - and amongst drivers - to electric vehicles.

But all the while, Tesla has stacked up huge losses. While its sales nearly doubled in 2015, its losses nearly tripled to $889m (£618m).


Tesla sold more than 50,000 Model S cars in 2015,
making it the year's best selling electric vehicle model

 

They may continue to rise as the company gears up for the Model 3, which involves building one of the world's biggest buildings, the Gigafactory, and ramping up production tenfold.

But what Tesla and its investors are betting on is that the car will sell in such numbers that the company can drive forward into the sunlit uplands, where revenues start leaping ahead of costs.

The eager customers who have been queuing up outside Tesla showrooms to pre-order the car are a good sign, though early excitement may fade if the company is as slow in delivering the Model 3 as it has been with previous models.

The other big question is whether there really is a mass market for electric cars, and if so whether Tesla is the company that will benefit.

Two issues are holding back mass adoption of electric driving: cost and charging infrastructure.

Potential buyers will want to be confident that finding a charging point won't be a problem

 

And they are linked. Wealthy owners of the current Tesla models are very likely to have a garage or drive where they can plug in to charge overnight.

The motor industry analyst Jay Nagley told me the Model 3 could be a tipping point for electric vehicles, and said Tesla had done the whole industry a favour.

"They've massively improved the image and made people feel they are the future," said the managing director of the Redspy consultancy.

But he thinks progress will now be steady rather than spectacular.

"The cost of batteries is coming down and the range is going up, but battery management systems - the technology around them - won't get much cheaper," he noted.

"And charging in the big cities is still a pain."

Others are also targeting the electric vehicle mass market.

In the US, the Chevrolet Bolt - about the same price as Tesla's new car - is already in production and should be delivered by the end of this year, 12 months before the Model 3.

General Motor's Chevrolet Bolt should have a year's lead on the Model 3 in the US

 

In the UK, we have a quarter of Europe's electric vehicle production and a fifth of all sales.

The production is mostly the Nissan Leaf, made in Sunderland - though at around £25,000 for a car with a range of around 100 miles (161km) it may begin to look expensive when the Tesla arrives.

What Tesla has achieved is already remarkable, forcing the likes of BMW, Porsche and GM to move their electric vehicle efforts from sideshows into the mainstream.

But now we will find out whether the pioneer can end up as the dominant carmaker of the electric age - or merely a footnote in its history.

Rory Cellan-Jones, BBC Technology correspondent. Petroleumworld does not necessarily share these views.

Editor's Note: This commentary was originally published by BBC News, on April 1, 2016. Petroleumworld reprint this article in the interest of our readers. http://www.bbc.com

All comments posted and published on Petroleumworld, do not reflect either for or against the opinion expressed in the comment as an endorsement of Petroleumworld. All comments expressed are private comments and do not necessary reflect the view of this website. All comments are posted and published without liability to Petroleumworld.

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