The Tesla Model 3 is about to emulate the success of the Apple iPhone, according to a venture capitalist that thinks the company could be worth “hundreds of billions” of dollars by 2027.

The car will start at $35,000, making it by far the cheapest vehicle Tesla makes, and reservations have surpassed the 400,000 mark, representing approximately $16 billion in sales. But while the company plans to make 500,000 cars per year by the end of 2018, it currently makes less than a fifth of that. This mass expansion means large-scale capital expenditure, and the whole plan bears strong similarities to Apple.

“What we do know is the early traction of Tesla is tracking close to Apple,” Chamath Palihapitiya, the CEO and founder of Social Capital LP, said at the Sohn Conference in New York. “That third iteration [of the iPhone] is what broke down the walls for consumer demand. The S and the X have set the stage for Model 3.”

The Tesla Model S.
The Tesla Model S.

Apple first launched the iPhone in 2007 starting at $499 on contract, selling over a million in its first year on the market. The second iteration that came out the following year, the 3G, started at $199. In 2009, though, Apple released the iPhone 3GS and sold the original 3G for a new low price of just $99. That year, Apple sold over 20 million iPhones.

“The iPhone was an unbelievable feat of technology, of engineering,” Palihapitiya said. “What this product did was capture consumer innovation and it created a tailwind of demand.”

Similar to how Apple built up momentum over time, Tesla could use this third iteration to push into a wider audience. Palihapitiya reasons that Model S and X buyers will be unlikely to switch back to a gas-powered car after going electric. These buyers have already chosen to spend over $68,000 on an existing Tesla, so the company will now be able to capture buyers who have been unable to afford the company’s vehicles until now, while enticing existing buyers to upgrading.

The Model 3 is set to enter production this July, with the boost in production fueled by the Gigafactory’s construction in the Nevada desert. CEO Elon Musk, which Palihapitiya described as “our generation’s Thomas Edison,” has been keen to clarify that the Model 3 is not a next generaiton car and instead represents a cut-price model. Nonetheless, excitement is running high as Tesla prepares to unleash its iPhone-like car onto the world.

Photos via Getty Images / Sean Gallup, Tesla