Tesla’s Model S and Model X have won the company acclaim, but long-time Tesla watchers know that both vehicles have been milestones along a path, not the final goal in and of themselves. Elon Musk has always said that he wants to build an affordable electric vehicle rather than focusing solely on high-end cars like the Model S or Model X. Today, Tesla confirmed that it intends to begin taking pre-orders on the Model 3 next month, and that the company’s $35,000 price target is before the application of substantial federal and state rebates.

“We can confirm it’s $35,000 before incentives,” Tesla spokesperson Khobi Brooklyn told Bloomberg. “We haven’t changed our minds.”

Factor in that rebate, and the price could be as low as $25,000. That puts the Model 3 squarely in midrange territory; the average cost of a new car in the US is $31,000. As Bloomberg notes, vehicles above $35,000 are typically niche products, SUVs, or trucks. Americans are also far more willing to consider a battery-powered electric vehicle as the cost drops, provided that the vehicle meets range requirements. The Model 3 is expected to offer at least 200 miles of range, and to be roughly 20% smaller than the Model S, with fewer luxury features.

A well-built Model 3 (don’t call it the Model III) could kick-start BEVs in the US in a way no vehicle has to-date. PEV sales have grown substantially over the past few years, though they dipped from 2014 to 2015 according to data compiled by InsideEVs. The company’s reports show EV sales falling to 116,597 in 2015 down from 123,049. Worldwide, EV sales still grew to 550,000 vehicles, up from 320K in 2014.

The slight decrease in US sales was probably driven by the dramatically falling price of oil, which began to slump in August of 2014 and has continued declining (with one notable spike) since then. Currently, oil is below $30 per barrel and the US average gas price has been below $2 for the past 25 days. The average price of gasoline today is $1.80, the lowest since January 2009.

These kinds of short-term spikes or dips shouldn’t drive purchasing as much as they do, but human beings tend to think in the short term and often buy vehicles they’ll drive for 5-10 years based on what the price of oil is now, rather than what it might be in the future. That said, Tesla has established a great deal of credibility with the Model S. If the Model 3 proves as popular as the company hopes, its unveil and eventual launch could unleash enormous pent-up demand. And if the Model 3 keeps most of the Model S’s acceleration, it could establish itself as the affordable mainstream EV that’s also fun to drive — not a category you see Car and Driver or Consumer Reports falling over themselves to award to, say, the Nissan Leaf.