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UPDATE: Tesla CEO Musk says Model 3 orders now at 232K

This is a breaking news story. Please check back for updates.

Years from now, people will look back at the unveiling of the Model 3 as a watershed moment not only for Tesla Motors, but for the entire auto industry.

Why?

Within 24 hours of launching its first lower-price electric car, Tesla locked in a large base of paid reservations directly from retail buyers, not dealers, for the model.

Tesla CEO Elon Musk said the company received 232,000 Model 3 orders in 24 hours. In a tweet Friday, he touted a "bright" future for electric cars.

"Recommend ordering soon, as the wait time is growing rapidly," Musk said in a tweet Friday afternoon.

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"We are simply awestruck by the demand surfacing for the Model 3," wrote Stifel auto analyst James Albertine. "We had no idea the reservation orders would be this strong."

Tesla shares were trading about 3 percent higher Friday afternoon. The trading volume in the stock more than doubled its 30-day average.

According to one Carnegie Mellon professor, the Model 3 may have sold more units in one day than the entire U.S. plug-in auto industry in 2015.

Tesla says the most basic version of the Model 3 will start at $35,000, though the first ones delivered are expected to sell for far higher prices, perhaps even as much as $55,000 or $60,000 due to customers adding more features like a bigger battery pack with greater range.

The automaker promises the base model will have a range of 215 miles fully charged.

Musk estimated the average car would sell for roughly $42,000, including optional features, for total sales of about $7.5 billion. However, that assumes all of the customers who made a deposit will complete the order.

Tesla said customers can cancel their reservations and receive a deposit refund any time before they confirm a purchase agreement. The agreement comes around the time production on an individual's vehicle is slated to start.

So how many of the 198,000 reservation holders will follow through and actually order a Model 3?

If this enthusiasm of those waiting in line to reserve a Model 3 is any indication, a high percentage of those putting down a deposit will follow through and actually order the new Tesla.

"I have a feeling this is going to be one of the best cars ever made," said one person waiting outside a Tesla store in Manhattan to put in their reservation.

Another Tesla fan waiting to reserve a Model 3 said, "This is a car company that is breaking the mold and doing stuff incredibly differently, and I totally trust that they are going to come out with an awesome car two years from now."

An unscientific CNBC.com reader survey suggested 51 percent of those polled would make a deposit and go through with the purchase. (Another 11 percent of respondents said they would not make a deposit but still planned to buy a Model 3 anyway).

Musk said he's "fairly confident" the first Model 3 vehicles will be delivered, as planned, by late 2017.

One factor that may have convinced some people in the U.S. to place a Model 3 reservation is the federal tax credit of $7,500 for buying an electric vehicle.

That incentive is currently scheduled to be phased out after an automaker sells 200,000 electric vehicles.

Questions? Comments? BehindTheWheel@cnbc.com.