Tesla Model III to start at $35,000, compete with BMW 3 series

UPDATED: 7/16/14 12:57 pm ET -- adds price, details

Tesla Motors Inc. said Tuesday that its lower-priced successor to the Model S sedan and upcoming Model X crossover, expected to go on sale in 2017, will be named the Model III.

The Model 3 will start at $35,000 -- half the starting price the Model S – and compete with the BMW 3 series.

Tesla CEO Elon Musk has said the new car will have a driving range of about 200 miles on a full charge. Musk has also said the new vehicle will be about the same size as the 3 Series.

 The name, pronounced “Model Three,” was revealed Tuesday in a report by British magazine Auto Express. The publication quoted Tesla CEO Elon Musk as saying he originally intended to call the car the “Model E,” but changed plans after Ford Motor Co. claimed rights to the name.

Tesla confirmed the report Tuesday on its official Twitter account.

The company could unveil the Model III as soon as the 2015 Detroit auto show, the Los Angeles Times reported last year. The company ultimately wants the sedan to boost its U.S. sales volume to 250,000 units a year, comparable to the volumes of luxury leaders such as BMW, Lexus and Mercedes-Benz.

Jack Nerad, an analyst for Kelley Blue Book, said, “A versatile, usable all-electric car at $35,000 would be a hit in the marketplace, but an important key to versatility and usability is range. If Tesla Motors can figure out the range issue and the associated charging time/charging station issue, they will strike gold.”

Gabe Nelson and Reuters contributed to this report.

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