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Lower-price Tesla racking up orders

Posted at 11:38 AM, Apr 04, 2016

DETROIT (AP) — Worldwide orders for the new lower-priced Tesla electric car hit 276,000 over the weekend, surprising even the company's CEO who says it may force Tesla to open another factory.

CEO Elon Musk posted the number Sunday on his Twitter feed and said if the trend continues, orders could hit 500,000 and would require another factory in Europe to meet demand.

Tesla's new Model 3 starts at $35,000 and has a range of 215 miles per charge. Customers must put down $1,000 to order the cars, which go on sale in late 2017. The Palo Alto, California, company started taking orders early Thursday, shortly before Musk unveiled the car in Los Angeles.

The number of orders is unprecedented when compared with electric car sales worldwide, especially for just a few days after opening. Nissan, which says its Leaf is the top-selling electric car in the world, has sold 211,000 of them since distribution began in late 2010. Tesla has sold a total of 110,000 electric cars since it started doing business in 2008.

Musk told people during weekend Twitter sessions that he expected one-quarter to one-half the number of orders. "No one at Tesla thought it would be this high before part two of the unveil" which will take place closer to when production starts, he wrote.

At 276,000 orders, Musk's company gets a cash infusion of $276 million from deposits and an order book valued at $11.6 billion based on Musk's estimated average Model 3 cost of $42,000 with options.

The orders boosted Tesla shares even though broader stock markets were slightly lower on Monday. Shares of Tesla hit $252.12 Monday afternoon, their highest intraday price since early October. In the past year they have traded in a range from $141.05 to $286.65.

Musk, who hasn't given out all details of the Model 3 yet, says the car will be rear-wheel-drive with optional all-wheel-drive, and its steering controls will feel like a spaceship.

The large number of orders makes it likely that many won't get a $7,500 U.S. electric car tax credit. The credit phases out when a manufacturer hits 200,000 in U.S. sales. Tesla won't say how many of the orders came from the U.S., but Musk says in tweets that a production ramp-up should let large numbers of Model 3 customers get the tax credit.

Tesla plans to have a presence in India before Model 3 production starts, and its high-speed charging system and service will cover all of Italy later this year, Musk says.

The Model 3 is less than half the cost of Tesla's previous models, and its range is about double what drivers get from current competitors in its price range, such as the Nissan Leaf and BMW i3. It also faces competition from General Motors, which is set to start selling the Chevrolet Bolt electric car at the end of this year with a similar price tag and a 200-mile range.