Tesla unveils Model 3, the mass-market electric saloon

Electric-car maker Tesla unveiled the first of its Model 3 saloons on Friday as the company drew closer to introducing the vehicle - which is priced for mainstream consumers - to the US market.

In a ceremony at Tesla's factory complex near San Francisco, the company's chief executive, Elon Musk, delivered the initial Model 3s off the assembly line to 30 employees chosen to be the model's first owners.

It was a pivotal moment in Tesla’s evolution from a manufacturer of luxury electric vehicles to a producer of mass-market cars. The company has yet to specify when it will begin selling the Model 3, priced at $35,000, to the half-million prospective buyers who have reserved cars with $1,000 deposits. But Musk said the vehicle would go on sale soon, the fruition of his ambitious goal to make electric cars available to a broad range of consumers.

"We finally have a great, affordable electric car, and it is absolutely what's needed," Mr Musk said at a media briefing on Friday.

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Despite collecting billions of dollars in losses, Tesla has been the darling of investors who have propelled its market value to be on a par with much bigger automakers like General Motors and Ford. Much of that enthusiasm is tied to the potential of the Model 3, which carries a price tag that allows it to compete directly with many traditional petrol- and diesel powered cars and sport utility vehicles.

Some car manufacturers have already said they will phase out the production of petrol- and diesel cars and the UK government announced this week that it would see combustion engine cars phased out by 2040.

"This is Tesla's most important milestone and one that may be the key to its success or failure," said Akshay Anand, an analyst with the auto-research firm Kelley Blue Book.

Mr Musk said he was unsure how quickly Tesla could accelerate production to meet the backlog of orders. “We are going to go through at least six months of manufacturing hell,” he said. The company is looking to more than quadruple its annual production rate, to 500,000 vehicles, by next year.

The first Model 3s for sale will be limited to those powered by a standard battery pack that can provide 354 kilometres of driving on a single charge. Tesla will later offer a long-range version of the car that has a higher top speed and a battery range of 500 kilometres.

The Model 3 mimics the sleek styling of Tesla’s considerably more expensive Model S. But the new model has an interior look all of its own, featuring a spare, wood-paneled dashboard devoid of instruments except a single computer touch-screen. The car is also equipped with so-called autopilot features that include an emergency braking system. Optional systems will be available that enable the car to virtually drive itself in certain traffic conditions.

In his comments Friday, Musk seemed awed by the interest in the Model 3, particularly from prospective buyers who continue to flood the company with deposits for a car that is still in the early stages of production. “We’re going to do everything we can to make cars as fast we can,” he said. “Demand is not the challenge here.”