Tesla Expands Its Model 3 Offerings—At a Steep Price

Elon Musk's automaker is now offering more variants of its most important car, and making steady progress toward profitability. But that $35,000 price point remains just a promise.
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Tesla is now offering variants of the Model 3 with swankier options. Just be ready to pay way more than $35,000.Troy Harvey/Bloomberg/Getty Images

In his grand goal to bring electric driving to the masses, Elon Musk has been doing his best Henry Ford impression. To date, that has included his own take on Ford’s famed quip: “Any customer can have a car painted any color that he wants so long as it is black.”

Since starting Model 3 production last summer, Tesla has simplified its production process by limiting its customers’ choice to a single variant of the sedan. With a larger battery and premium upgrades, that version starts at $56,000, well north of the much-touted $35,000 base price. (Buyers do get their choice of six colors, though.)

Now that Tesla seems to finally be emerging from “production hell,” Musk took to Twitter this weekend to reveal a series of new options for prospective Model 3 owners. The dual-motor setup that enables all-wheel drive is now available, for an extra $5,000. So is the performance version of the car, with extra-blistering acceleration, starting at $78,000.

These price tags are frustrating some less wealthy drivers who are eager to buy a Musk-mobile for $35,000. (Insane! They might say. Ludicrous!) “Outing a $78,000 version of the Model 3 long before the $35,000 base trim is in showrooms is a misstep and demonstrates a lack of appreciation for the mainstream new-car buyer” says Rebecca Lindland, an auto industry analyst with Kelley Blue Book.

Musk justified the long wait for people wanting the cheaper car (some of whom stood in line outside stores back in March 2016 to put down their $1,000) by saying the company has to focus on higher profit margin models at first, or it would “lose money & die.”

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Exacerbating the problem is the fact that Tesla will soon lose access to the $7,500 federal tax credit for low- and zero-emission cars, which starts to phase out once an automaker sells its 200,000th qualifying vehicle in the US. Offering the high-end variants of the Model 3 now means buyers waiting for the $35,000 car are less likely to benefit from the government’s largesse. And they’re the ones to whom $7,500 can make a major difference.

(Over the last few days, Tesla has told customers who have made it to the top of the waiting list that their deliveries are being pushed from June to July. The automaker says that’s because it got an unusually high number of orders, but it might also push that magic 200,000th delivery to the start of the third quarter of the year, delaying the point at which the tax credit starts to phase out.)

However, if you’ve been waiting for the swanky new options, they are compelling. The dual-motor setup slashes the car’s already rapid 0–60 time from 5.3 seconds to 4.5. The performance version will get you every extra, including a new carbon fiber spoiler (which might not do anything useful but looks the part) and a choice of black or white seats. It also drops the 0–60 sprint even further, to 3.5 seconds, just a second off Tesla’s $135,000 Model S P100D.

Along with the new variants, Tesla now says that people who put their name down now for a car in the original production setup (long-range battery, premium interior) could wait as little as four to six months to see it roll into their driveway, down from 12 to 18 months. Existing reservation holders will likely get their cars even faster, depending on when they put down their name (and their $1,000).

Still, this is one of the most scrutinized cars ever, and not everyone likes what they see. Today, Consumer Reports denied the Model 3 its coveted “recommended” rating due to poor braking performance. (Most reviews, including WIRED’s, have praised the car’s performance and handling.) “The lack of a Consumer Reports recommendation won't hurt the brand amongst its loyal following but certainly makes it harder to penetrate the mass market Tesla is relying on for long-term growth,” Lindland says.

On Monday evening, Musk responded on Twitter, saying Tesla would investigate whether some Model 3s have longer stopping distances than others. He said a software update might fix any issue, and "even if a physical upgrade is needed to existing fleet, we will make sure all Model 3’s have amazing braking ability at no expense to customers."1

Growth will be crucial over the next few months, if Tesla is going to make it not just from the red to the black (which Musk says should happen later this year) but into the mass market. It took Henry Ford 19 years to sell 16.5 million Model T cars. Musk’s Tesla, of course, would like to get there a bit quicker.

1Updated at 11:00 pm ET on 5/21/2018 with Elon Musk's new comments.


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