How much more hype can Tesla’s Model 3 get?

Tesla says it’s received 325,000 reservations of the Model 3 as of the morning of April 7.1By the time you read this, they’ll probably have convinced thousands more to put down a $1,000 deposit for the opportunity to spend another $34,000 in two years on what isregarded as a great car.

And never mind the haters, hating on their Costco-loads of haterade they’ll need to guzzle to keep the bile from rising in their throats. What about the tax credits sunsetting?  What about the production delays? Elon Musk can’t even get his rocket to return to earth and land upright except for that one time, so how will he ever deliver a gazillion cars?

Anyway, they say – muttering over crossed arms and shrugged shoulders – they’re just toys for millionaires.

Perhaps. But if that’s the case, Elon Musk has apparently put a Model 3 on all their wish lists. If the top 0.1% of Americans control as much wealth as the bottom 90%, as of now, Tesla has sold all of them – and thousands more –  a new Model 3.

And even with all of the revenue, PR and design wins, it was the email I received this week from Tesla that makes me wonder.

“Meet Model 3” it said. It thanked everyone for the massive success to date of the newest model’s launch and breathlessly added that “in the first 24 hours Model 3 received over 180,000 reservations, setting the record for the highest single-day sales of any product of any kind ever in world history.”

Right.

I’m sure the average bread baker was pretty popular way back in the far reaches of history – say, after a long famine or war – but there are no good stats and even less marketing machinery to rely on for that information, so let’s bring it to the present day.

Apple had 4 million pre-orders in 24 hours for its iPhone 6 and 6 plus in September 2014. Yes, iPhones are a product. Of an attractive kind. From very recent world history.

Tesla just sold tickets to 2% of all 2015 auto sales…in a week

But let’s set aside Apple for some apples-to-apples. The best information we can find on historic car preorders was from 2008-09, when Toyota’s latest Prius racked up 75,000 preorders as gas prices neared $5/gallon before the Great Recession.

The National Auto Dealers Association (NADA), whose members don’t like Tesla’s dealer-less approach to sales, told me they don’t really keep track of that kind of car brand popularity. But they have their own numbers to stick in the spokes of Tesla’s careening road bike of headlines.

“Often things that seem new aren’t new at all,” said Jonathan Collegio, senior vice president of public affairs for NADA, which represents 16,500 new vehicle dealers in the U.S. “Traditionally, between 2% to 5% of car sales are built-to-order vehicles purchased from dealerships, which means that between 350,000 and 800,000 vehicles were custom-ordered in 2015.”

OK, fair enough. Let’s call Tesla’s new model “built-to-order” – although right now, “built-to-aspiration” is more accurate.

But it means Tesla has hit the bottom end of that annual range of all automakers’ U.S. custom orders….in a week. Having a new entrant rise up to snatch a big piece of market share of future annual sales seems “new” from this perspective. (Yes, we’re assuming Tesla can deliver all these Model 3s in a year, and yes, we know about the production snags on their current models.)

The Automotive News Data Center reports that around 17 million cars were sold in the US in 2015, worth $570 billion. Tesla already has sales that, if executed, would be roughly 2% of that market by value. And the first Model 3 won’t even roll off the assembly line for nearly two years.

“While build-to-order culture is pervasive in Europe, American consumers generally prefer to drive their new purchases off the lot,” Collegio countered. Got it. Americans, we’re impatient. We want it now.

So it’s even more interesting that so many people are paying $1,000 to wait.

Dear Tesla: yes, you’re winning right now

Tesla team, you are – by all accounts – crushing it.

Our view here at ReadWrite is about trying to get a pulse on the Internet of Things (IoT) and the broader connected world. Tesla is at the forefront of this wave of technological advance. And like Tesla, IoT often gets tarred with the “hype” label, too. So we like to see the money backing up the talk.

To us, the Tesla Model 3 is some fantastic engineering. Tesla is the first automaker to update your car’s software over the air. Their Autopilot system is great driver assist technology. More importantly, Tesla’s work in this space has lit a fire under competitors. Their work is critical to the autonomous vehicle future as a whole – for all of its various players, from Uber and Google, to Ford and Toyota.

Musk has said he expects fully autonomous vehicles in two years. Roughly when Tesla Model 3s start showing up in driveways.

Writing a four-figure check today for long-dated option to buy confirms the Model 3’s value. But how long and innovative will these next two years be in autonomous vehicle technologies? 

What will our car ecosystem even look like then? What about automotive data security? What about battery range? Will we even be buying cars anymore if even Uber has gone driverless? Will self-driving cars take us everywhere at a safe speed…or just bring stuff to us?

We look forward to more news from you about how you’ll tackle these potential issues. But, Tesla, you’re making it. You don’t need to fake it anymore with breathless emails. You did just blame hubris for shanking your production goals, after all.

And congratulations on the awesome sales.