AutoGuide.com

Funny Man Thinks Model 3 Will Cause 3 Series Sales to ‘Go to Zero’

5
Funny Man Thinks Model 3 Will Cause 3 Series Sales to ‘Go to Zero’

The BMW 3 Series is one of the best-selling luxury cars in the world, but one market analyst thinks the release of the Tesla Model 3 will cause sales of the compact four-door to “go to zero.” 

The statement was made by the founder of venture capital firm Social Capital, Chamath Palihapitiya, on CNBC’s Fast Money Halftime Report. He said people are “fundamentally misunderstanding the demand of the Model 3,” and claimed the electric four-door is so popular that the entire business of the 3 Series “is going to go to zero.” While it’s true that the Model 3 will likely put a dent in 3 Series sales, the car is an established player in the luxury car landscape and won’t be selling “zero” units annually anytime soon.

SEE ALSO: Bringing Tesla Model 3 to Market May Result in ‘Manufacturing Hell’, Musk Says

The success of the Model 3 hinges on Tesla’s ability to actually get the car to customers. There will be a “long wait” for Model 3 customers, Musk revealed back in June,  saying if you placed an order at that time then you probably won’t get the car until late 2018. Tooling up its Fremont plant to produce the Model 3 has also proved to be a considerably expensive endeavor for Tesla, with the automaker forced to raise over $1 billion in capital to help with costs associated with the Model 3’s launch. With over 450,000 pre-orders hanging in the midst, Tesla has also been forced to ramp up production at a fast rate. “Given that we will be ramping Model 3 production so quickly, even a couple-week shift in timing can have a meaningful impact on total deliveries,” the automaker said in a statement.

SEE ALSO: Will My Tesla Model 3 Qualify for Tax Incentives?

The long wait list for the Model 3, combined with the Trump administration’s lax attitude toward environmental regulations and the arrival of competing products from established automakers could put a damper on the Model 3’s sales. Tesla will have to have a trouble-free launch and a much better product than rival car manufacturers in order for the Model 3 to be a true disruptor, and even then, it seems far-fetched to think it will be so successful that the 3 Series will die off.

[Source: CNBC]