Model 3 holds promise, and peril, for Tesla

FREMONT, Calif. (AP) — For Tesla, everything is riding on the Model 3.

The electric car company’s newest vehicle debuted Friday. Its $35,000 starting price — half the cost of Tesla’s previous models — and 215-mile range could bring hundreds of thousands of customers into the automaker’s fold, taking it from a niche luxury brand to the mainstream.

Those higher sales could finally make Tesla profitable and accelerate its plans for future products like SUVs and pickup trucks.

Or, the Model 3 could dash Tesla’s dreams.

Potential customers could lose faith if Tesla doesn’t meet its aggressive production schedule, or if the cars have quality problems that strain Tesla’s small service network. The compact Model 3 may not entice a global market that’s increasingly shifting to SUVs, including all-electric SUVs from Audi and others that are going on sale soon.

Limits on the $7,500 U.S. tax credit for electric cars could also hurt demand. Once an automaker sells 200,000 electric cars in the U.S., the credit phases out. Tesla has already sold more than 126,000 vehicles since 2008, according to estimates by WardsAuto.

“There are more reasons to think that it won’t be successful than it will,” said Karl Brauer, the executive publisher for Cox Automo

tive, which owns Autotrader and other car buying sites.

Tesla started taking reservations for the Model 3 in March 2016. Within a month, 373,000 customers had put down a $1,000 refundable deposit. Tesla’s website says people making reservations now should expect to get their car in the middle of 2018.

But carmaking has proved a challenge to Tesla CEO Elon Musk. Both the Model S and the Model X SUV were delayed and then plagued with pesky problems, like doors that don’t work and blank screens in their high-tech dashboards.

Tesla’s luxury car owners might overlook those problems because they liked the thrill of being early adopters. But mainstream buyers will be less forgiving.

“This will be their primary vehicle, so they will have high expectations of quality and durability and expect everything to work every time,” said Sam Abuelsamid, a senior researcher with Navigant Research.

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