Yes Of Course Tesla Will Sell A $35000 Model 3

[EinSV]

I think I'm going to go with building 3 $50k Model 3 LR + PUP is easier than building 4 $35k Model 3 SR w/o PUP

Good point. Also, while Tesla is in the process of ramping up to 5000/week the cost per vehicle is much higher because they are incurring costs of plant, equipment, etc. designed to build 5,000 vehicles spread out over a smaller number, plus much higher labor costs per vehicle. So it makes sense to start with a higher priced model to reduce the cash burn during the ramp-up process.

But Tesla did not choose to build the highest priced vehicles first -- Performance or Dual Motors -- probably because they are more complex to engineer and build (and in the case of Performance lower volume). The LR/PUP as a first model is a middle ground that allows them to get to high volumes while minimizing cash burn during the ramp up process.

In any case, since it was the plan all along to start with the LR/PUP version before building the base model I don't think following that plan suggests anything has changed regarding Tesla's intention to build the base Model 3.

 

[Uncle Paul]

There is a lot of demand for a $35,000 Model 3. I am sure that Telsa will build cars for these people.

Saw this in the past when they originally offered a Model S with 40kw battery packs. Not enough people were ordering them to justify making those few smaller packs, so he put in a 60 kw pack, reduced the capacity with software, and lower the price to address that market. Since then many have upgraded their 40 packs to 60 packs, as they see the value. Others are quite happy with the 40s at the lower price.

As production ramps up, Tesla will want to draw those who want a $35,000 (Maybe at $39,000 adjusted for inflation). They will begin to offer a lower cost configuration. Depending on demand at that time they will adjust production concurent with demand.

Elon has long said that even their base models offer a compelling driving experience. You can tell he never takes his eye off those looking for value as much as changing the world.

 

[NCAviator]

In any case, since it was the plan all along to start with the LR/PUP version before building the base model I don't think following that plan suggests anything has changed regarding Tesla's intention to build the base Model 3.

What is your source for this statement. Was it on the reservation site? Was it stated by Musk at the launch event? No, it came out at his press event when they handed out 30 M3 to employees.

Just be honest with folks. If the goal is to get to 5000 units as fast as possible. LR/PUP is not the fastest way. The press has said that a pacing item is availability of battery packs. Takes longer to make a LR battery than an SR battery.

Yes, cash flow for a young company is important. So is stock price. So is getting the largest number of satisfied customers.

Not saying he made the wrong choice. Time will tell. Just saying the folks that are at the bottom of the scale where not told at reservation time. I am sure the press will cover how many of the $35K folks don't order when they don't get the tax credit. Reservation order rate will probably be for less than the 500,000. Might be less than 300,000. How will it look if it is only 50% or less?

 

[EinSV]

What is your source for this statement. Was it on the reservation site? Was it stated by Musk at the launch event? No, it came out at his press event when they handed out 30 M3 to employees.

Just be honest with folks. If the goal is to get to 5000 units as fast as possible. LR/PUP is not the fastest way. The press has said that a pacing item is availability of battery packs. Takes longer to make a LR battery than an SR battery.

Yes, cash flow for a young company is important. So is stock price. So is getting the largest number of satisfied customers.

Not saying he made the wrong choice. Time will tell. Just saying the folks that are at the bottom of the scale where not told at reservation time. I am sure the press will cover how many of the $35K folks don't order when they don't get the tax credit. Reservation order rate will probably be for less than the 500,000. Might be less than 300,000. How will it look if it is only 50% or less?

I was referring to the plan since the configurator opened — In the OP I was addressing the claim made by some that since the initial estimated delivery date for the base Model has slipped from “early 2018” to “late 2018” that meant that Tesla does not plan to build a base $35K version, which I think is incorrect for all the reasons mentioned above.

As far as the impact of producing the base version after the LR on sales I think Tesla will have no problem selling 500K+ Model 3s per year for years to come — probably a lot more than that — as soon as they can ramp up production to that level. (That’s a topic for another thread What's the ultimate demand for the Tesla Model 3? ). I am sure they would have preferred that the ramp was not delayed so they could start selling the standard battery around now as originally estimated when the configurator opened.

 

[NerdUno]

Yes, cash flow for a young company is important. So is stock price. So is getting the largest number of satisfied customers.

Not saying he made the wrong choice. Time will tell. Just saying the folks that are at the bottom of the scale where not told at reservation time. I am sure the press will cover how many of the $35K folks don't order when they don't get the tax credit. Reservation order rate will probably be for less than the 500,000. Might be less than 300,000. How will it look if it is only 50% or less?

Selling fewer $35K vehicles would be a godsend for Tesla because I seriously doubt they can break even on producing the Model 3 at that price. Certainly all of the literature on the subject has suggested otherwise. At least for me, that better explains the missing $35K car option.

 

[S4WRXTTCS]

After Tesla’s delays ramping up the Model 3 program we now see many posts stating that Tesla will not sell a $35000 Model 3 or raising doubts about it.

I think the naysayers should be ignored and these doubts should be set aside.

This might be what they're saying, but it's not really what they mean. What they mean is they won't be able to get a $35K Tesla with a $7500 tax credit.

That's really what they wanted, and it's simply not going to happen.

 

[EinSV]

This might be what they're saying, but it's not really what they mean. What they mean is they won't be able to get a $35K Tesla with a $7500 tax credit.

That's really what they wanted, and it's simply not going to happen.

Hmmm -- these folks seem to disagree with you, along with many others who similarly suggest Tesla will not sell the base $35K model or will offer only token numbers before quickly discontinuing it.

Nope. Not gonna happen.

First, it would be at least $35k plus $1k delivery so it’s already $36k. Second, by the time they actually ramp production they will realize they can’t make money on a base price of $35k and they’ll either just cancel their plans, make some kind of add-on package mandatory, and/or increase the price.

Elon likes calling the Model 3 a $35,000 car. What he likes better is charging $50,000 for it and still getting the press to call it a $35,000 car.

They’ll eventually do a handful so Electrek can write a fawning article about promises kept ... then it will be discontinued in the face of ‘overwhelming demand’ for higher optioned (priced) variants. It’s the S40 unicorn scenario, Part Deux. Good luck buying one.

Unless Tesla is trying to be a better car company. That’s a good reason.

Also let’s separate something. Other cars that “Start at...” can actually be purchased at their advertised price. The Model 3 can’t and never will be.

 

[McRat]

... Just saying the folks that are at the bottom of the scale where not told at reservation time. I am sure the press will cover how many of the $35K folks don't order when they don't get the tax credit. Reservation order rate will probably be for less than the 500,000. Might be less than 300,000. How will it look if it is only 50% or less?

It's not just price where things were misleading. Some of us figured Tesla was not going to sell a $35k anytime soon, if ever. I guessed $52k for a 245 mile model so I was pleasantly surprised.

I do not believe there is anywhere near 100,000 people in North America who will buy a >$50k Model 3 in the next year.

If I were told on March 31st that Model S and X owners would be able to buy as many Model 3's as they want for family, friends, or scalping and are always at the front of the line, I would not have made a reservation. ie - if I was told I was expected to buy a Model S/X new or used before getting a place in line for a Model 3, I would not have signed up. Sure I could buy a used Model S for $50k, get my Model 3 order in, then sell the Model S, but I'll be damned if I'll pay our abusive sales taxes 3 times (yes it affects what you sell a car for) for 1 car.

It's more like multi-level-marketing than Tesla's "no-dealers" claim. Or perhaps "50% Off!" *

* with purchase of the entire set of 12

 

[ChrisH]

I’m just upset that the standard range battery is going to keep getting pushed. I’m not planning on spending ONLY $35k, but I need the $35k version battery to get the car I want. I want a $46k car (SR+PUP+EAP+MSM paint). Not having that option until at least 2019 is frustrating.

He WILL put out an AWD LR option before the SR. I’m almost completely convinced of that. This keeps the price at least as high as the first production even if they allow non PUP in those cars (I think they will force the PUP too so it’s even more expensive than first production).

 

[S4WRXTTCS]

Hmmm -- these folks seem to disagree with you, along with many others who similarly suggest Tesla will not sell the base $35K model or will offer only token numbers before quickly discontinuing it.

I can certainly understand being cynical of the $35K price point Tesla in the short term. But, I don't agree with any of those statements.

Ultimately it's up to the market to decide whether there will be a $35K Tesla. So far the market is saying 2019 or maybe 2020. ​

Let's say you're a non-Tesla ICE car owner, and wanted to replace it with an Electric car for around the $35K price point.

You could order now (assuming a reservation holder) to get a Model 3 LR for $41,500. Sure that's not $35K, but you'll get soon where there is likely to be very little depreciation over the next year or two. It's you're only car so an LR version isn't necessarily a bad thing. It's extremely likely that it will hold it's value well for awhile.

If you're not too tied up in Tesla or the Supercharger network there is always a Bolt/Leaf/etc.

The one thing I think most of us can agree on is the $35K Tesla will be an odd duck. Where most people will have at least one or two options that will price it above. That's hardly anything new with cars.

I think Tesla will hit that in 2020 (for being able to easily order it, and getting it), but they won't go lower than $35K. They'll cater to other markets they've missed like a cross over, a cargo van, a pickup truck, etc.

 

[omgwtfbyobbq]

Unless Tesla is trying to be a better car company. That’s a good reason.

Also let’s separate something. Other cars that “Start at...” can actually be purchased at their advertised price. The Model 3 can’t and never will be.

Not all cars that start at whatever can be purchased at that price point. IIRC, the second gen Prius had a package I configuration that was only really available for fleet sales. Everything available to the public was package II and up. As for destination, tax, title, and lincense, that'll always up the cost.

 

[S4WRXTTCS]

I’m just upset that the standard range battery is going to keep getting pushed. I’m not planning on spending ONLY $35k, but I need the $35k version battery to get the car I want. I want a $46k car (SR+PUP+EAP+MSM paint). Not having that option until at least 2019 is frustrating.

He WILL put out an AWD LR option before the SR. I’m almost completely convinced of that. This keeps the price at least as high as the first production even if they allow non PUP in those cars (I think they will force the PUP too so it’s even more expensive than first production).

It's hard not to be convinced when it's in WRITING on Tesla's website.

Mid 2018 - AWD Version with PUP
Late 2018 - SR with optional PUP

Mix in a little Elon time and that pushes the dates a bit.

 

[ChrisH]

I can certainly understand being cynical of the $35K price point Tesla in the short term. But, I don't agree with any of those statements.

Ultimately it's up to the market to decide whether there will be a $35K Tesla. So far the market is saying 2019 or maybe 2020. ​

Let's say you're a non-Tesla ICE car owner, and wanted to replace it with an Electric car for around the $35K price point.

You could order now (assuming a reservation holder) to get a Model 3 LR for $41,500. Sure that's not $35K, but you'll get soon where there is likely to be very little depreciation over the next year or two. It's you're only car so an LR version isn't necessarily a bad thing. It's extremely likely that it will hold it's value well for awhile.

If you're not too tied up in Tesla or the Supercharger network there is always a Bolt/Leaf/etc.

The one thing I think most of us can agree on is the $35K Tesla will be an odd duck. Where most people will have at least one or two options that will price it above. That's hardly anything new with cars.

I think Tesla will hit that in 2020 (for being able to easily order it, and getting it), but they won't go lower than $35K. They'll cater to other markets they've missed like a cross over, a cargo van, a pickup truck, etc.

$41,500 for LR?

 

[S4WRXTTCS]

$41,500 for LR?

$35,000 Base + $9000 (LR Battery) + $5000 (PUP) - $7500 Tax Credit.

You're also in WA so you have to consider the sales tax exemption that is ending soon.

 

[ChrisH]

$35,000 Base + $9000 (LR Battery) + $5000 (PUP) - $7500 Tax Credit.

You're also in WA so you have to consider the sales tax exemption that is ending soon.

Ah. That’s fair. Wasn’t even on my radar because I didn’t think I’d realistically be in the market for even the model 3 so reserved way late. The $41,500 mark sounds so much better haha. Best I can get the LR for would be $49000 -$3750 probably (sales tax exemption will be gone). I also want PUP and MSM so now it’s $55,000 -$3750 (but sales tax would be $5500 so I’m looking at close to 60k if I want my desired configuration. If they keep pushing the SR out, we may not even be eligible for $3750 or $1875 off.

 

[ChrisH]

It's hard not to be convinced when it's in WRITING on Tesla's website.

Mid 2018 - AWD Version with PUP
Late 2018 - SR with optional PUP

Mix in a little Elon time and that pushes the dates a bit.

Yeah. It’s too bad. As others have said, those that are looking for the SR model likely need the tax credits more and are less likely to get them.

 

[ChrisH]

$35,000 Base + $9000 (LR Battery) + $5000 (PUP) - $7500 Tax Credit.

You're also in WA so you have to consider the sales tax exemption that is ending soon.

Man. Just did the math and it’s only $50,000 out the door for LR+PUP+EAP+paint for someone who gets the full federal credit and WA tax rebate. That’s amazing. *goes in the corner and pouts because he didn’t know he could have got this deal has he reserved day one*

I’m likely to pay $48,000 or more out the door for SR with the same other add ons once I finally get the chance!

 

[azred]

I’m almost positive that once the software is “complete”(whatever that ends up meaning) and they have a couple hundred thousand people into Model 3’s, they’ll do what they did with S and give a free trial to everyone to try and convert the holdouts. For AP1, the best sales job was just getting to try it and realize how big a difference it can make in daily driving in traffic and big trips.

Agree re the free trial likelihood and wouldn't be shocked if price comes down. If not, I'm not buying for either of my two Teslas. As for people who think that's crazy, they are entitled to their own opinion.

My wife doesn't want AP and it's not a big deal to me. We always fly for long trips and I don't trust other drivers enough to use much in the city. When I've had service loaners I have played with it but it's no big deal to me.

As a motorcyclist I like space and that means adjusting lane positions based on traffic whereas AP plants the car in the middle of the lane always.