End of last week Tesla unveiled its model 3: the mass market EV. This $ 35 000 base price 215+ miles vehicle was largely believed to be the make it or break it product for Tesla. After its unveiling, the Model 3 has become not only a statement for Tesla Motors but for the overall electric vehicle revolution. The 3 (or E as it was supposed to be called) has proven that the world is ready for EVs. The electric vehicle revolution is happening now.

No market insiders, analysts nor Tesla itself were brave enough to project the numbers we see today. In the first hours prior to the unveiling, without even seeing the car, 130 000 people had reserved the Model 3. This is something than even Apple has never pulled off: selling a product before it´s launch. Tesla had already grossed 130 000 000 to its bank account. But it did not stop there. By today there are more than 300k reservations. That is 300 000 000 in their bank account. Mr. Musk had predicted an average selling price of $42k per vehicle. This means that by today Tesla has sold for 300 000 x 42 000 = 12600000000 = 12.6 billion dollars.

How did they pull this off?


1. The cost of batteries is declining rapidly


This is a pure demonstration of human potential: when financing research, results will come.

2. Lawmakers are supporting the transition to a clean future

In addition to electric vehicle incentives we are now talking about eliminating combustion vehicles altogether. Lawmakers in Holland want to ban combustion cars by 2025.

3. But most importantly, all Teslas are connected

This helps Tesla to achieve unprecedented speed of innovation. Checking the status of the vehicle from the smartphone or conducting over the air updates is just the tip of the iceberg. The real value comes from the fact that Tesla can gather precious technical as well as usage data.

In short, Tesla is conducting lifetime test after they have sold the vehicles. They have more than 50 000 test vehicles around the globe that cover millions of miles every day. Moreover, as they have constantly made small modifications on their production vehicles they are able to validate new designs against previous solutions. All in all, this helps them to optimise their product range according to the actual conditions and usage.

The data (and the smart analysis of it) helps them to make extremely fast product iterations to build cars that achieve the highest test rankings. But the secret weapon does not lie in the technical but in the usage data.

Tesla knows exactly how people use their vehicles. How often they ride, how long rides they take, when do they charge, how do they use their ACs and what kind of music they listen. They even know what is the load of the car (thanks to their smart air suspension system), how many people are traveling.

Usage data is the real gold. Tesla knows their customers, inside out.

And this helps them to build products that customers love.

It really is that simple

Connectivity enables success…