The rise of Tesla: From boutique to big time?

Since its inception in 2003, Tesla has pushed the development of electric cars at a rate unmatched by any mainstream manufacturer. With niche cars like the Roadster and high-end electric saloons like the Model S, the Silicon Valley startup has a core following among cashed-up early adopters, but March 31 marks the date Elon Musk takes his project to the mainstream with the more affordable Model 3. So how did Tesla get here, and what challenges lie ahead?

Tesla was formed in 2003 by a group of engineers in Silicon Valley. Keen to prove the instant torque, smooth acceleration and zero emission motoring offered up by electric cars, Martin Eberhard and Marc Tarpenning financed the fledgling company until Elon Musk's involvement began in 2004. The story around who is responsible for Tesla's foundation and initial funding is still contested, but after a game of musical chairs involving the brand's founders, Elon Musk took over as CEO in 2008 and still holds the reins to the electric car manufacturer.

Roadster

In his first year in charge, Musk oversaw the launch of the Roadster, a Lotus-based sports car capable of dispatching the 0-60 mph (97 km/h) sprint in 3.7 seconds on its way to a 209 km/h (130 mph) top speed. Drawing on 6,831 lithium-ion cells, the Roadster was fitted with a complex network of microprocessors to maintain balance and temperature among the batteries. Power was put to the road through a single speed gearbox, after initial attempts at making a two speed unit were foiled by the Roadster's torquey three-phase, four-pole AC induction electric motor.

Although it set tongues wagging at launch, the Roadster's debut wasn't exactly without incident. For one, initial range estimates promised 245 miles (394 km) before an "equipment calibration" error led to that figure being downgraded by 24 miles (39 km). In 2009, the Roadster was recalled for incorrectly tightened rear flange bolts, which could cause owners to lose control and crash – not something you want in any car, let alone your US$110,000 roadster of the future.

It wasn't all bad though: road testers were blown away by the car's lightning acceleration, and impressed by the Lotus Elise-based chassis' setup.

Model S

If the Roadster showed the world electric cars could be fun, the Model S announced Tesla's intentions to move from boutique startup to a more realistic electric alternative to luxury stalwarts like Mercedes, BMW and Jaguar. Launched with a 40, 60 and 85 kWh battery packs, the Model S range now starts with a 70 kWh option, before jumping to a 90 kWh rear-drive and an all-wheel drive 90 kWh performance model.

With a claimed range of around 420 km (261 mi), the entry level Model S will hit 100 km/h (62 mph) in 5.8 seconds thanks to its 235-kW (315 hp) electric motor that generates 440 Nm (325 lb.ft) of torque. Those figures quickly jump into supercar-shading territory when you enter the P90D, which can reach 100 km/h in 3.0-seconds with the Ludicrous Mode upgrade installed. Thanks to upgraded battery connectors, which eschew steel for corrosion- and oxidation-resistant Inconel, the P90D Ludicrous' maximum pack amperage is 1,500 A instead of the 1,300 A from regular Model S.

One of the most prominent aspects of Model S ownership are Tesla's over the air updates, which ensure its cars are always fitted with the latest version of software. As well as updating things like dashboard layouts and the functionality of the in-dash touchscreen, over-the-air updates have helped to cut down on range anxiety by taking weather and altitude conditions into account and even added adaptive cruise control and lane keeping functionality to cars that previously lacked such capabilities.

Superchargers

Amid the constant hardware and software updates to the Model S, Tesla has also been rapidly expanding its network of Superchargers. There are currently 611 Supercharger stations worldwide, which means owners have access to 3,600 individual charge points across America, Europe, Asia and Australia.

Unlike a regular wall socket, Superchargers operate at up to 120 kW and can give cars a range of up to 270 km (168 mi) in half an hour. It's not as quick as a fuel stop, but much faster than the few hours Tesla's own quick charger would require to provide the same charge.

Currently, the stations are positioned along major highways. For Australians, that means Model S owners can theoretically cover the 1,000 km (621 mi) between Melbourne and Sydney on Supercharger power alone. But with a starting price around $71,000 in America, and a list price of over AU$132,000 Down Under, the Model S is still well beyond the reach of the average buyer - as is the falcon wing-doored Model X SUV based on the same platform.

Model 3?

That's where the new Model 3 comes into play. Preorders for Tesla's cheaper sedan start on March 31st, although the car won't be produced until the Gigafactory being built in conjunction with Panasonic is up and running in 2017. Once the Nevada facility is open, Elon Musk is hoping to have it pumping out 500,000 battery packs annually by 2020: enough to support Model 3, Model S and Model X demand.

The Gigafactory will also support production of the Powerwall, a home battery designed to store energy for home owners keen to make the most of solar panels or cheap off-peak power rates.

According to an earning report released last year, the Model 3 will cost $35,000 and offer a range of more than 320 km (200 miles), which is similar to that offered by Chevrolet's Bolt. With 150 kW (200 hp) and 360 Nm (266 lb-ft) of torque on tap, the Bolt will have a range of over 320 km (200 miles) and retail for $38,000 before American tax rebates kick in.

So, why all the fuss about the Model 3 then? After all, Chevrolet is also out there trying to create an affordable EV for everyone, while Nissan and BMW already have production electric cars, as do Renault, and Mitsubishi.

Put simply, the Model 3 represents a crossroads for Tesla as it battles to become profitable. The Model S, Model X and Roadster are niche cars: perfect to show the world electric can deliver face-melting acceleration and usable range. But they're still beyond the reach of the average buyer.

What's more, Tesla is still a small fry compared to the automotive giants of the world, shifting 50,850 cars in 2015 compared to BMW's 2.2 million. Is it fair to compare a fledgling Silicon Valley startup with a company who's range starts with the Mini Cooper and tops out with the Rolls-Royce Phantom? Maybe not, but it's worth mentioning the relative size of Tesla when we start talking about volume sales.

Having recorded a $92 million loss in the second half of 2015, volume relative to the Model S and Model X is what Tesla needs from its new, smaller offering.

If the Model 3 can cash in on the cool-factor that has won the Model S and Model X so many fans, but also keep costs down, it can be the catalyst for the first American car company to float its stock since Ford in 1956 to cement electric power as a legitimate alternative to gasoline and diesel offerings.

We don't have long to wait for answers to these questions. The Tesla Model 3 launches tomorrow.