Tesla's Model 3 will face some serious competition - but it does have a few advantages (TSLA, GM)

This story was delivered to BI Intelligence IoT Industry Insider subscribers. To learn more and subscribe, please click here.

The announcement of the Tesla Model 3 was a resounding success for the company with more than 275,000 pre-orders in the first weekend of sales.

But there will be some stiff competition for the sedan when it starts shipping next year, according to Tech Insider. The BMW 3 Series, Jaguar XE, Audi A4, and Mercedes Benz C-Class are all priced in the same range ($33,000 to $38,000) as the Model 3 ($35,000) and come from more established luxury brands.

The toughest competitor of all could be GM's Chevy Bolt, an all-electric vehicle with similar capabilities to the Tesla Vehicle. It is priced at $37,500 and will beat the Model 3 to the market by about a year.

But the Model 3 has the advantages of Tesla's distinct design, as well as Autopilot capabilities such as autonomous emergency braking and side collision warning. The Bolt has no such comparable features.

GM, on the other hand, has a significant advantage because it does not need to make money on the Bolt because it is making tremendous sales on other trucks and SUVs as gas prices have remained low. It also has $23 billion in cash on its balance sheet, so the car company could even sharply drop the price of the Bolt simply to beat the Model 3.

That would be disastrous for Tesla, which cannot win a price war with GM. Tesla is burning through cash at a rate of almost $400 million per quarter as it increases its production capabilities. And it would likely take years for Tesla to sell enough Model S and Model X vehicles to reduce the price of the Model 3.

Instead, Tesla would need to rely significantly on its brand image to compete with the discounted Bolt and hope that is enough to hook consumers and convinced them to spend more on a Tesla vehicle.

The autonomous features would likely be a focal point of Tesla's promotion of the Model 3, which is arriving at a time in which other companies such as Google are trying to get fully self-driving cars on the road. But there will be roadblocks before fully autonomous cars become the norm.

John Greenough, senior research analyst for BI Intelligence, Business Insider's premium research service, has compiled a detailed report on self-driving cars that examines the major strides automakers and tech companies have made to overcome the barriers currently preventing fully autonomous cars from hitting the market. Further, the report examines global survey results showing where fully autonomous cars are highly desired.

Tesla Motors

Here are some key takeaways from the report:

• Three barriers have been preventing fully autonomous cars from hitting the road: 1) high technological component prices; 2) varying degrees of consumer trust in the technology; and 3) relatively nonexistent regulations. However, in the past six months, there have been many advances in overcoming these barriers.
• Technology has been improving as new market entrants find innovative ways to expand on existing fully autonomous car technology. As a result, the price of the components required for fully autonomous cars has been dropping.
• Consumer trust in fully autonomous vehicle technology has increased in the past two years.
• California became the first US state to propose regulations. California's regulations stipulate that a fully autonomous car must have a driver behind the wheel at all times, discouraging Google's and Uber's idea of a driverless taxi system.

In full, the report:

• Examines consumer trust in fully autonomous vehicles
• Identifies technological advancements that have been made in the industry
• Analyzes the cost of fully autonomous technology and identifies how cost is being reduced
• Explains the current regulations surrounding fully autonomous cars

To get your copy of this invaluable guide, choose one of these options:

1. Subscribe to an ALL-ACCESS Membership with BI Intelligence and gain immediate access to this report AND over 100 other expertly researched deep-dive reports, subscriptions to all of our daily newsletters, and much more. >> START A MEMBERSHIP
2. Purchase the report and download it immediately from our research store. >> BUY THE REPORT

The choice is yours. But however you decide to acquire this report, you’ve given yourself a powerful advantage in your understanding of the emerging world of self-driving cars.