The car is claimed to be capable of covering 310 miles on a single charge, according to official tests carried out by the US's Environmental Protection Agency.
This figure applies to the Long Range variant. The car is available with 50kWh or 75kWh batteries.
The 50kWh model has a claimed range of 220 miles, hits 0-60mph in 5.6sec and has a top speed of 130mph. The Long Range model costs from $44,000 (£33,400), can do 0-60mph in 5.1sec and has a 140mph top speed.
In the UK, the entry-level price is expected to be around £30,000 after the £4500 government grant for zero-emissions vehicles is applied. That will pitch the Model 3 against the likes of the Audi A4, BMW 3 Series, Jaguar XE and Mercedes-Benz C-Class in terms of pricing and size.
A Performance variant is due later, but Musk has previously said a more powerful 100kWh battery (which is the standard battery for Tesla Performance models) will not fit into the Model 3's smaller structure. This suggests Tesla might only slightly increase the battery size of the 75kWh Model 3 for the Performance version.
The Model 3 is more than 400kg lighter than the Model S, so it could be quicker than the Performance version of that car.
Model 3 owners will not get free access to the Tesla Supercharger high-speed charging system, with the company planning to charge for electricity as demand grows and it requires more investment to build up the network of chargers.
However, if Tesla hits its planned production of 500,000 cars a year - something it has faced an uphill struggle to achieve until the recent 5000-car milestone - analysts predict that it will outsell BMW, Mercedes-Benz and Lexus in the US.
Prospective Tesla Model 3 owners tell us why they're buying one
Tesla launched its Semi lorry and a new Roadster last year, following an injection of $1 billion (around £800 million) worth of investment into the company - something Musk has previously said would help the company meet high demand for the Model 3.
Tesla has raised capital to help production and ease the financial risk associated with the production run. This has led to a rise in its share price and has been further boosted by reports of its future model plans, including the Model Y compact SUV, according to New York financiers.
However, some analysts still question Tesla's ability to ramp up production to meet its demand. The brand is yet to make a profit, although the latest reports suggest it could do so later this year.