The Ongoing Myth of the $35,000 Tesla Model 3
Tesla and the media continue to claim that the "Tesla model 3 starts at $35,000." But does it really? Not according to window stickers posted by owners online. And not according to Tesla if you read closely into the Tesla launch plan.
A Tesla with the $35,000 MSRP has not yet been sold. The 2017 Model 3 "started" as a Tesla Model 3 Long-Range. The long range is the only Tesla that has an EPA listing at this time, and the only one being delivered to customers. That car costs $45,000 to buy. However, that is only if the car is black. If it is any other color, add another $1,000. Here's how we came to that figure:
Base Price = $35,000 + Mandatory $1,000 Destination and Regulatory Doc Fee = $36,000
Long Range = $9,000
Total price of starting Tesla Model 3 = $45,000
Eventually, Tesla claims it will roll out what we presume will be called the "Short Range" Model 3 or Base Model 3. But it has not done so. The media who claim that the Model 3 starts at $35,000 have never driven one. Never seen one. Yet they continue to pretend that it actually does exist. Tesla Model 3s that have been seen and driven by media outlets cost $57,500. At least in the case of Motor Trend, who were provided a car that they say had a $45,000 "base price" and a $57,500 "Price as tested."
The Verge overviewed the Tesla Model 3's pricing and said of the $35,000 price tag, "barely anyone will pay that price." They went on to say, "This may be a product of uncontrolled hype, Tesla not doing enough to clarify what the Model 3 would be, or the company going too far to meet that $35,000 benchmark, but it wouldn’t surprise me if regular people get sticker shock once Tesla publicly releases the Model 3 configurator online."
Jalopnik took a look at the Tesla Model 3's prices and said, "That much-vaunted $35,000 price tag is kind of a technicality more than anything else." They concluded that "Pretty much any option at all, including a color that isn’t black, gets you to $43,000 very fast."
Why does it matter? For a few reasons. First, the Model 3 was supposed to be "affordable" and "mainstream." Affordable cars that are mainstream are cars like the Honda Civic Hatchback (which is larger than the Tesla Model 3) and the Toyota Camry. They run in price from roughly $22K to roughly $35K in price. Including the destination fee. A car that costs $57,500 is not "affordable" and is unlikely to ever be "mainstream."
Unlike the Chevy Bolt, the Tesla Model 3 will not be discounted by the Tesla dealerships, or whatever Tesla prefers to name them. Elon Musk has been very clear on that point, saying that Tesla must "never discount a car."
The Tesla Model 3 launch has gone about as badly as any automotive launch in history. With sales of the Model 3 now about six months behind the promised schedule, the short-range Model 3s are being pushed into late 2018 or beyond. When those 2018 model year cars launch will they still cost $36,000, or will Tesla raise the price? Even more important, with the short-range $36,000 cars being pushed out, will the federal tax deduction even be available to those "mainstream owners" or will it have run its course by then?