The first challenge will be delivering vehicles on time. Musk said he feels "confident" the company will meet its goal of delivering the first Model 3 vehicles in late 2017.
"The electric vehicle market is getting more and more crowded and as the months go by, there will be more competition from major manufacturers, so time is of the essence," Nerad said. "I think based on their history, they are not noted for exactly hitting the mark right on the money in terms of delivery, so I think there are some concerns about that and some of those pre-orders will fall away because of that"
On the design front, the Model 3 fits into the Tesla family with sleek lines and boasts a roof area with a continuous pane of glass, giving the five adults it can seat extra headroom and the feeling of having more space, Musk said.
The key metric many people were waiting for was range per charge. The Model Model 3 can go 215 miles on a single charge, which is around what Nerad said he expected from the vehicle. Musk also committed to doubling the number of Tesla's public charging stations from 3,600 to 7,200.
It also includes semi-autonomous driving features, including automatic lane changing and lane keeping, and can accelerate from zero to 60 in less than 6 seconds, Musk said.
"You will not be able to buy a better car, any better car, for less than that," he said.