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Tesla CEO claims half a million reservations made on new Model 3 car

Tesla CEO, Elon Musk has claimed that there has been close to half a million reservations on the eagerly anticipated Model 3. Musk made the comments as the US-based electric car manufacturer released the first 30 Model 3 vehicles to employee buyers.

The Model 3 will retail at $35,000, and many believe Tesla's latest model will now determine whether or not the company will execute its strategy of becoming a profitable mass market producer of electric cars. At the electric automakers factory in Fremont, California, Musk took to the stage to perform a driving demonstration in a red Model 3.

Musk revealed that the Model 3 can travel 220 miles (350km) on a charge that marks a significant change from the company's earlier produced luxury vehicles. In addition to this, Tesla's CEO confirmed that it had produced 50 of the vehicles so far, which included 20 that were used for testing purposes.

Musk conceded that it will be a 'challenge' to build the car during the early days of its production life-cycle, suggesting that Tesla will go through at least six months of 'manufacturing hell'. However, one huge positive for Tesla, is the number of reservations made on the Model 3. The number of reservations made on the car is now at over half a million, which represents an increase from about 373,000 that was disclosed in April.

Analysts have predicted that any new buyers would not receive their car until the end of 2018, whilst it was also announced that a longer-range version of the Model 3, priced at $44,000 is also available. That particular car can drive 310 miles (500km) on a single-charge. Some of the features in the Model 3 include a streamlined dashboard devoid of tactile switches, buttons or knobs, with a 15-inch touch-stream display.

However, some cynics are claiming that Tesla faces a series of challenges in terms of living up to the 'hype' of the Model 3. The 500,000 vehicles Tesla is vowing to produce next year are nearly six times its 2016 production.

If they were hit those projected sales targets, it would likely see them outsell car manufacturing giants such as BMW, Mercedes, and Lexus in the US. Production problems and delays marred the launch of Tesla's Model S and Model X, and many are predicting that Tesla will have more headaches with the Model 3. Tesla has already invested over $2 billion already this year ahead of the launch.

Financial analysts have expressed their concerns that a troubled launch of the Model 3 will heighten the risks for the company, although it did point out that if the launch was successful, it would enable Tesla to avoid going to the capital markets to fund its operations.

Tesla's share price has increased by a whopping 54 percent since January in anticipation of the Model 3 launch, and indeed its pricey valuation now exceeds that of traditional rivals like General Motors Co and Ford Motor Co.