SemaConnect Blog


April 26, 2016

Tesla Model 3: Is this the iPhone moment for EVs?

The recent Model 3 launch was one of the most eagerly anticipated events in the electric vehicle community. On the day of the launch, there were long lines of people waiting outside Tesla showrooms to make a $1000 deposit to reserve their cars. These lines formed in cities as varied as Copenhagen, Rotterdam, London, San Francisco, and Shanghai. On the first two days 325,000 people had put down deposits, giving Tesla a total of $325 million in pre-orders.

Tesla Model 3

Tesla Model 3

No product launch in recent tech history has seen such excitement and enthusiasm from consumers, with one exception: the Apple iPhone. When Apple announced the introduction of their smartphone, the lines of people at Apple stores before the launch was unbelievable. Some people camped out in front of their retail stores for more than a day so they could be first in line for the phone. Since then, every time Apple releases a new version of the iPhone, we see people waiting patiently in line to be the first one on the block with the new gadget.

Massive line for the iPhone 6 in New York City

Massive line for the iPhone 6 in New York City

Revolutions don’t march down a street with a band in accompaniment. Often they sneak in quietly, gathering momentum, until one day they unleash a tidal wave of change on the prevailing order. When Apple introduced the iPhone, the pundits were lukewarm about its potential, and pointed to “flaws” like the absence of a keyboard. The prevailing phone manufacturers at that time also did not see the iPhone as a threat, dismissing it as a lightweight competitor or a fad. But in the ensuing years, the iPhone went on to eviscerate the competition and become the dominant player in the smart phone business. The iPhone, in fact, established the template of what a smartphone should be: full screen, apps, full-fledged web browser. Today the iPhone still dominates the premium end of the marketplace. The smart phone market place expanded with competitive operation systems like Android and Windows.

Variety of iPhones

Variety of iPhones

Electric vehicles are also poised to rapidly emerge as the choice with consumers and displace internal combustion engine (ICE) automobiles over the next few years. Electric Vehicles (EV) have better acceleration, far lower fueling costs and virtually no maintenance costs. Since EVs are still in the low volume manufacturing situation, their price points are higher than ICE automobiles. But their volumes are climbing dramatically and are poised to go into sound barrier shattering mode over the next two years. As volumes increase, economies of scale kick in and they will achieve price parity with ICE vehicles. At this point, it’s game over for the internal combustion engine. Stay tuned and hold onto your hats as we get through this momentous upheaval.

About the Author: 

Mahi Reddy is the CEO and founder of SemaConnect. He is a serial entrepreneur, with SemaConnect being his sixth successful company. Mr. Reddy is passionate about electric vehicles in every aspect, from their environmental benefits to their automotive perks. An EV driver himself, he works passionately to jump start the EV revolution.

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