All that you should know about Tesla Model 3 sedan

Text: Reuters

Tesla Motors on Thursday gave a sneak preview of its Model 3 sedan, saying more than 130,000 people had ordered the car, even though it is more than a year away from production.

Tesla Chief Executive Elon Musk unveiled a prototype of the Model 3 in Hawthorne, California outside Los Angeles to hundreds of Tesla owners and the media, saying the vehicle will go into production in 2017 at a starting price of $35,000.

The Model 3 is critical to the Silicon Valley automaker's growth plans and to sustaining its lofty stock price. Tesla shares have jumped in recent days in anticipation of the Model 3 launch.

The Model 3 will enter a crowded field of luxury and electric cars that includes gasoline-fueled models such as the Audi A4 and BMW 3-Series, and electric models such as the forthcoming Chevrolet Bolt EV from General Motors Co.

Three Model 3s were driven onstage. The compact sleek four-door car with no grille features a roof that is a panoramic pane of glass from front to back.

Fans had camped out overnight, queueing outside Tesla stores across California to put down deposits on the car in scenes reminiscent of the launch of Apple Inc products.

Tesla says scale from the massive facility will cut the cost of its battery pack by 30 percent to enable the lower-priced vehicle.

The Model 3 and others in the new generation of electric vehicles face challenges from low gasoline prices, high battery costs and uncertain investment in recharging infrastructure.

Through the first two months of this year, sales of all-electric and hybrid vehicles are down nearly 9 percent to 60,384 vehicles, data from trade group the Electric Drive Transportation Association shows.

That's fewer hybrid and battery electric vehicles sold in two months than Ford sold of its F-series large pickup trucks in February alone.

Several short-term concerns, such as that Model 3 production will be delayed, and the slow ramp of the Model X will continue, go hand-in-hand with skeptics' longer-term worries that the unprofitable company will continue to bleed cash.