TSLA Tesla Inc

Reservations for Tesla Motors Inc.'s Model 3 electric car have now topped 276,000 since the company began taking deposits on March 31.

The figure is staggering and could represent both an evolution for Tesla and for electric cars. Tesla CEO Elon Musk gave an update on reservations on Twitter late Saturday evening, after updating the figure several times since Thursday evening's unveiling of the prototype Model 3, due out in late 2017.

The Model 3 is a sedan capable of seating five and going 215 miles on a charge and 0-60 mph in less than 6 seconds, starting at a price of $35,000.

"All efforts focused on accelerating the ramp," Mr. Musk said in a tweet, his standard form of communication.

Mr. Musk also said the company is planning to send out gifts to people who waited in line at Tesla stores as a token of appreciation.

To give a sense on the scale of the backlog, BMW sold about 95,000 3-series sedans in 2015 in the U.S. The Model 3 is roughly the same size and price and would likely outsell the U.S.'s best-selling compact luxury car in its first year of production if Tesla can make enough cars.

Mr. Musk, on Sunday, said on Twitter that the Model 3 will be a rear-wheel-drive car with all-wheel-drive as an option.

The 276,000 reservations equates to an $11.6 billion backlog of orders, based on Mr. Musk's assessment that the average Model 3 would cost about $42,000 with options. Last year, Tesla's global revenues were about $4 billion.

To date, in its existence, Tesla has shipped about 110,000 cars, most of the Model S sedans. It has struggled at times with manufacturing and is still slowly ramping up production of the Model X, its sport-utility vehicle that launched late last year. The huge vote of confidence in its forthcoming vehicle is a blessing and a curse. It is vindication for Mr. Musk and his confidence that the company could sell 500,000 cars a year by 2020, a figure that seems possible now, though still optimistic.

The enormous interest in a car that won't ship for at least 18 months, however, presents a difficult challenge for the Palo Alto, Calif., auto maker. Mr. Musk has just 20 months to ramp up production amid continuing quarterly losses and hefty cash outflows.

The production also will have to sync with the completion of Tesla's giant battery factory, dubbed the "gigafactory" by Mr. Musk. He showed images of the huge, white building during the presentation on Thursday. The plant will produce batteries for the Model 3 and is key to reducing the price of the battery packs enough to be able to make the vehicle affordable.

Write to Mike Ramsey at michael.ramsey@wsj.com

(END) Dow Jones Newswires

April 03, 2016 20:35 ET (00:35 GMT)

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