Tesla Motors, Inc. (TSLA - Analyst Report) unveiled the Model 3 electric car in Hawthorne, CA on Mar 31. Customers will be able to get the vehicle by the end of 2017.

Tesla’s third-generation electric car, Model 3, costs half as much as Model S. The sedan’s starting price is $35,000 before government incentives. Model 3 is very crucial for Tesla. The electric automaker aims to capture a larger market with this vehicle.

Tesla is planning to make Model 3 available in many more countries, including India, Brazil, South Africa, South Korea, New Zealand, Singapore and Ireland. Customers in these countries can book the vehicle online. This will expand the market size for the automaker and boost sales.

The three key takeaways from the Model 3 launch are as follows:

Innovative Features of Model 3:

Model 3 is a sleek four-door sedan with autopilot hardware. It has storage space available in both the front and rear. The vehicle also has semi-autonomous features like automatic lane changing and lane-keeping. The roof of the vehicle is made of glass from front to back, which provides extra headroom.

Model 3 also has a large touchscreen in the center of the dash, similar to that of Model S and Model X. The vehicle will offer a range of 215 miles per charge and acceleration of 0–60 mph in less than 6 seconds. The vehicle has a capacity of 5 adults and has enough space to hold a seven-foot surfboard inside.

Huge Pre-orders:

Tesla confirmed that within 24 hours of opening bookings, pre-orders reached about 115,000 for Model 3. Half an hour later the booking increased to 137,600 units. Customers need to deposit $1,000 to book the vehicle. Model 3 booking is limited to two vehicles per person.

Supercharger Expansion Plans:
In order to support the increasing number of electric vehicles on the road, Tesla will expand its Supercharger network. A higher number of Superchargers ensures that Tesla vehicle owners can travel conveniently. At present, Tesla has 3,600 Superchargers worldwide which it intends to double to 7,200 by the end of next year. The company also has 3,600 destination chargers, which it aims to quadruple. In addition, the electric maker expects to double the number of its stores to 414 worldwide by the end of 2017.

Bottom Line:

Tesla believes that the launch of Model 3 will improve its sales and revenues. Despite witnessing a rise in sales, Tesla still remains a loss making company. The automaker expects to generate profit once Model 3 reaches full-scale production in 2020, which is quite a long time span. In addition, the company will be incurring rising expenditures for the development of Model 3. This will adversely affect its cash balance. Thus, the actual impact of the launch of Model 3 remains a wait-and-watch story.

Zacks Rank:

Currently, Tesla carries a Zacks Rank #3 (Hold). Some better-ranked automobile stocks include Federal-Mogul Holdings Corporation (FDML - Snapshot Report), Wabash National Corp. (WNC - Snapshot Report) and Superior Industries International, Inc. (SUP - Analyst Report). All the three stocks sport a Zacks Rank #1 (Strong Buy).