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]
Sam McEachern holds a diploma in journalism from St. Clair College in Windsor, Ontario, and has been covering the automotive industry for over 5 years. He conducts reviews and writes AutoGuide's news content. He's a die-hard motorsports fan with a passion for performance cars of all sorts.
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"combined with the Trump administrations lax attitude toward environmental regulations" Yeah, right - like the regulation against non-existent methane from mining operations. Get real, fella. Or the nonsensical one about "groundwater" Thank God someone threw this Obama "environmental" crap and its billions out the window.
NOTICE TO THE AUTHOR OF ARTICLE: Firstly let us get something straight here, just because you write an article on a website it does not make you intelligent or correct. It does not make you a somebody and it does not make you the greatest human ever. I know these are difficult things to wrap your head around and concepts above your head but they are true so I suggest you deal with it. Now let me prove how wrong you are. Yes BMW are an established car maker, however that does not mean they will be around forever. History is littered with examples of established companies who disappeared the way of the dinosaurs. Right now the world is looking at a seismic shift in the auto world, whether you like it or not. The transition to EVs is happening and will pick up speed in the next decade. France and the UK (and perhaps China it seems)have announced a ban on new petrol/diesel cars from 2040. You might say that "Oh well that is years and years away so does not matter". If BMW and others take that view then they will procrastinate and by the time they act it will be too late and the ban will be in place. Meanwhile car makers such as Tesla will have amazing cars out by then that will be years ahead of anything that BMW and others would manage to release if at all. BMW do not have any serious or credible plans on the EV front. If we ignore for one moment the actual cars and look at the business plan, Tesla have a very successful plan, they start with the high end cars and use the profits to help fund the development of the next model lower down the price ladder. They also have the supercharger network which is a huge asset the other automakers do not have. Yes they rely on third party charging stations but that is dumb. They are reliant on updates does when that company decide to, not when the car maker needs them. They put them where they want and not where the car maker needs them and so on. So BMW will flounder big time in trying to transition and they can not do so quickly as all of their assets are tied up in ICE not EV. So they will not want to write off huge assets and equipment in the transition. Tesla have no such problems starting from scratch with EV. There will always be drivers who stick with BMW because of the badge factor, which diminished a long time ago. Trust me, the BMW badge stopped being thing in the real world a long long time ago. You and others are deluded if you think it still has the cache it once did. BMW means you get the wheels, the body, seats and the air inside and that is about it. Everything else you pay for. Then they slap a badge on and say "It is a BMW so we think it is worth it". Yes they can drive well but they are not the best driving machines around, they are about average. Hardly worth the price tag. Now for the same sort of money you can get the Tesla Model 3 and let us compare them. Tesla Model 3 gets cheaper over time thanks to the savings in petrol/diesel. It is updatable over the air and can get smarter. It will be able to drive itself. Has more advanced driver aids than BMW 3 series. Has no emissions and does not pollute and can be powered by renewables as well as being extremely safe to drive. BMW 3 series gets more expensive to drive the longer you own it. has a bigger carbon footprint than the Model 3, pollutes with emissions, is not updatable and not as smart, little future tech and can not drive itself. So once your typical driver notices more Model 3s on the road and learns how much better it is than any other petrol/diesel car they will start to switch to EVs, especially Tesla regardless of what ICE car they drive. They especially will switch once they learn an EV such as Tesla can save you money over the long run compared to BMW 3 series costing you more. so while the Model 3 will not wipe out BMW 3 series sales yet, it will eat into them BIG TIME! I mean the Model 3 was the most successful product launch ever, beating the 3 series by a huge margin. over 500,000 orders and still increasing and all without ANY adverts! So in a few years(admittedly) once supply catches demand and Tesla advertise, expect at least 1 million Model 3s a year. Expect BMW to then get worried. It is not the end, but it is the beginning of the end for BMW 3 series.