Tesla Will Begin Taking Preorders on Its Make-or-Break Vehicle

Elon Musk said starting March 31, Tesla will begin to take preorders on what many believe to be the electric car company's make-or-break vehicle, the Tesla 3.

The Tesla 3 is expected to launch early next year, and represents the company's first foray into the "affordable" realm—Musk said on Twitter that the family sedan will cost roughly $35,000 and will come out sometime early next year. Reservations will cost $1,000 and will start March 31 in Tesla stores and April 1 online.

Even though gas prices have fallen dramatically, Tesla has seen high demand for its Model S luxury sedan and its SUV crossover, the Model X. Musk announced on an earnings call Wednesday that it expects to ship between 80,000 and 90,000 cars this year, which would beat investor forecasts.

All of this is good news for those betting on a bright future for electric cars. Tesla's early problems were managing to get its cars designed and manufactured on the tight deadlines it had set for itself. The Model X, for instance, finally began shipping late last year after a two year delay.

With the Model S and the Model X, Tesla has been working with relatively small quantities of cars—the company only passed the 100,000 cars sold mark back in December. And that's why the Tesla 3 is being looked at as such an important car: It's Tesla's first attempt at launching a mass market vehicle.

Tesla is building a "Gigafactory" in Nevada, which will be the world's largest lithium-ion battery factory in the world and will be used to ramp up production of the batteries used in the Tesla 3. Meanwhile, General Motors announced the Chevy Bolt, an all-electric car that will cost $30,000 after a federal electric vehicle credit of $7,500 and will have a range of more than 200 miles. It's expected to come out before the Tesla Model 3 and will compete directly with that car.

And so Tesla's future success likely hinges on whether it can deliver the Tesla 3 on time at the cost it's promised. Tesla has missed lots of deadlines before, but with its production of the Model S and Model X seemingly under control and the Gigafactory on the way, perhaps the company is ready to make the jump to the mass market.