By Seth Fitzgerald / CIO Today. Updated December 16, 2013.
For many consumers, the thought of having a car that never requires gas is amazing. As great as that idea may sound, consumers have had to stay away from electric vehicles due to their high prices and, to a lesser extent, their short ranges. At least one of those hurdles may be removed by 2015 now that Tesla will be releasing a $40,000 version of its popular zero-emission car.
Of course, $40,000 is by no means a budget price, but in the realm of electric vehicles, it is a great deal and one that some middle-class consumers may finally be able to afford.
A Few Years Away
Tesla has confirmed that it plans to unveil the cheaper car in early 2015 but it may take an extra year or two before the vehicle is made available to consumers. Even with a release at least a couple of years away, the cheaper car will finally allow Tesla to compete for the average driver's wallet. At $70,000, Tesla's Model S cannot do that.
With a fair number of car companies revealing they also will have electric cars on the market as early as 2014, Tesla's cheaper vehicle may not be the first one to compete in the budget market. However, Tesla has always focused on premium vehicles, which should allow it to attract budget consumers even if mainstream car manufacturers have zero-emission cars available before 2016.
Tesla, despite its growing popularity, is still a small manufacturer. With just one vehicle on the market, it is on track to build 21,000 units. That figure is not sustainable in the long run but as analysts have begun to point out, a cheaper vehicle would allow Tesla to stay relevant a decade down the road.
Tesla may be one of the most well known electric car companies, but other mainstream manufacturers have recognized that demand for zero-emissions cars is growing. Between consumer demand and policies that will require dealers to cut how many gasoline-powered cars are sold over the coming decades, manufacturers see the electric car market as a great place to grow.
Sales of zero-emission vehicles tripled in 2012 and have grown even more in 2013, with more than 100,000 electric cars now on the road in America. If estimates are correct, electric cars may end up controlling 40 percent of the new car market by 2035. There are obvious and measurable benefits to using a zero-emission vehicle both in the form of long-term savings and the decrease in greenhouse gas production attributed to gasoline-combustion cars.
A group of states have already agreed to put in place requirements that will boost sales of electric cars through the coming years by limiting the number of gasoline vehicles that can be sold. That provides an even bigger reason for manufacturers to expand their electric car lines.