Tesla's Seemingly Deceptive Pricing For Model 3 Will Continue Into Second Year of Sales
Imagine if Apple advertised its new iPhone X at $699, but when you got to the Apple Store, or went online, the only one Apple would sell you would cost over $900. How do you think customers and government consumer protection groups would respond to that sort of bait and switch pricing? Imagine if Exxon Mobil put up signs at its gas stations advertising gasoline at $1.99, but when you got to the pump, the cheapest gas that station stocked – or had ever stocked since the sign went up - was priced at $2.62? There are laws in America that prevent this sort of price manipulation to take advantage of consumers, and many of them apply specifically to cars. Yet, for well over a year now, Tesla has been marketing its new Model 3 as a car that “Starts at $35,000.” Although the Model 3 has now been on sale for nine months, Tesla has never built a Model 3 that had a $35,000 sell price. And it doesn’t plan to do so any time soon.
The mass media, who often has little understanding of the details or background on what automotive topic they are reporting on, has been Tesla’s partner in this. Sadly, so too has the automotive media, including groups like Consumer Reports and Popular Mechanics. They report in their reviews and articles that the Model 3 has a base model that “starts at $35,000.” Yet, Tesla doesn’t have a model that it builds or sells that starts at $35,000. It’s cheapest available Model 3 from the first day it went on sale in July of 2017 until today, is sold at $46,000 before options are added. Most of the Model 3 cars sold to publications have actual prices near $60K.
Here are a few headlines and quotes from some media outlets reporting on the Model 3:
- Men’s Journal
The headline is typical. Meet the $35,000 Tesla Model 3. The quotation at the start of the story is, “The $35,000 Tesla Model 3 is finally here. Elon Musk revealed the EV meant for the masses Thursday night in Los Angeles — a proper five-seater that is sleek, quick, and, most importantly, starts at $35,000.”
- CNN Money
The headline is, Tesla Model 3: $35,000 Price, but Buyers Could Pay $25,000. The quote in the story is “Tesla’s affordable new electric car might be even more affordable than we were led to believe.”
- Inside EVs
The headline is Tesla Model 3 Arrives: 215 Miles Of Range, $35,000 – Full Details. In the story the quote is “The Tesla CEO was also quick to point out that the long-promised price-point of $35,000 was also still in play…”
In fairness to the above publications, they didn’t realize at the time that they published these stories that they were being flim-flammed. An automaker claiming a price and then selling cars dramatically higher wasn’t something common. After all, it’s illegal. And unethical, and any publication that carried water for an automaker who lied to them, would surely never trust the automaker again– right? Don’t kid yourself. Splashy headlines get pageviews, and plausible deniability is golden.
Now that the cat is out of the bag and multiple outlets, including Torque News, have done their best to clarify that the base Model 3 has never been built, and isn’t scheduled to be anytime soon, one would assume that trusted publications aren’t spreading the myth of the $35,000 Tesla Model 3 around anymore. Right? Wrong.
Consumer Reports, who is at its core a consumer protection group, still writes as recently as last month, “With a promised starting price of $35,000, Tesla is aiming the Model 3 at cars such as the the Audi A4 and BMW 3 Series—but without any emissions.” Yet, Consumer Reports knew full well that there was no $35,000 Tesla Model 3 actually for sale. The group had just bought one and paid $59,000.
In the May 2018 print edition of Popular Mechanics, the publication names the Tesla Model 3 “The (Most Fun) Car of The Year.” In the “specs” section, Popular Mechanics lists the Model 3 as having a “Base Price” of $35,000. Yet, there is no base price Model 3 for sale, or ever having been sold, with a price of $35,000. And Popular Mechanics knows this. The one they tested cost $55,000. The author points out that $55,000 is “a lot more than $35,000.” He also says that he’d skip all the options except Autopilot and get a less expensive one. Except Tesla won’t build that car for Popular Mechanics, for you, for me, or for anyone. And it never has. How do we know that? Clean Technica tried to do it.
The latest news on the base Tesla Model 3 is that Tesla won’t build any “$35,000 base” Model 3 cars until late 2018. That means that the Model 3 will have been on sale and customers will have been receiving deliveries for over a year at a minimum before the version that made all the headlines may show up. EV advocacy publication Clean Technica says about the ongoing delay of the low-priced model, "If nothing else, that suggests a willingness to fudge the facts and borders on willful deception."
Imagine if Apple promised you a $699 iPhone X, but told you to come back in 13 months (but you can pay over $900 now). Or if Exxon Mobil promised you $1.99 gas, but said come back in May of 2019 (or you could just pay $2.62 now). Imagine the outrage by consumers and the media, and imagine the government lawsuits.