People stand in line to put down a $1,000 deposit on the new Tesla Model 3 in Scottsdale. (joeycarrera /the republic)
When I saw the photograph of people waiting in line at the Scottsdale Fashion Square mall (some since 3 a.m.) to put $1,000 down on a car they will not see for more than a year, the Tesla Model 3, a number of thoughts crossed my mind.
Who are these people, I thought, who would buy a pig in the poke? My father used to echo the saying, there’s a sucker born every minute, but I’m not sure these people fall in the category. They obviously have the money to do so.
John DeLorean with his DMC-12 in the 1980’s. (carwals.blogspot.com)
My mind drifted back to the 1980s when John DeLorean introduced the DeLorean DMC-12, a futuristic automobile with a rear-mounted engine and a brushed aluminum finish to its fiberglass body. One of its better-known features was its gull-wing doors.
In the case of the DMC-12, dealers found it wasn’t hard to sell as they took in $10,000 deposits on a car without knowing what the end cost was going to be. They were told it would be comparable to a Corvette. The Tesla Model 3 is expected to sell between $35-40,000. And there’s a possibility of a $7,500 electric car government subsidy.
The Tesla Model 3. (uagolos.com)
The risk of investing $1,000 in a Tesla Model 3 and its chief executive Elon Musk with his $13.5 billion net worth, is a far cry from investing $10,000 in a DMC-12 with DeLorean, a former General Motors department head credited with designing the Pontiac GTO and several other cars.
DeLorean was faced with a slump in the automobile market during the economic doldrums of 1980. He was competing with other sports cars selling with much lower price tags, including the Corvette. In 1981, with 7,000 unsold cars, his company went into receivership.
Musk isn’t without his problems. Still facing problems meeting commitments for his Model X, Musk doesn’t expect full production of the Model 3 until 2019. And, like DeLorean faced in the 1980s, Musk faces competition from other new electric models like the Chevy Bolt and the Nissan Leaf, as he ramps up the Model 3.
I marvel that there are Americans who, despite the negative influences of the Obama administration on our economy, still have hope for the future, as evidenced by the $185 million in Model 3 down payments committed in the first 24 hours last week. Orders are now at 276,000 and expected to hit 500,000.
While I continue to oppose big government’s café standards, designed to move consumers from fossil fuel autos to electric models with their subsidies, I admire the entrepreneurial spirit of Musk, who also invested in Space X following his success with PayPal.
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