By on May 22, 2018

You know what we’re talking about, right? The Tesla with the affordable price that everyone couldn’t stop talking about during the 2016 unveiling? That one. Not the Model 3 Long Range model, currently the only version in production ($44,000 to start), and not the $78,000 dual-motor performance model announced this past weekend.

We’re talking about the $35,000, 220-mile entry level Model 3. Lost in the hubbub over the performance variant and the apparently controversial Consumer Reports review is the latest approximation of when reservation holders stand to see a stripped-down version of the slow-to-ramp electric sedan.

Responding to a query on Twitter, CEO Elon Musk characterized the long wait for the base Model 3 as being essential for his company’s health. There’ll be no shorter-range variants added to the mix until the automaker achieves a steady rate of at least 5,000 (costlier) Model 3s per week, he said.

“Shipping min cost Model 3 right away wd cause Tesla to lose money & die,” Musk tweeted. “Need 3 to 6 months after 5k/wk to ship $35k Tesla & live.”

There’s no mention of June in his tweet, but the end of the second quarter is when Tesla hopes to achieve that rate. Previous production targets have come and gone without being met, so it’s no wonder Musk isn’t listing a specific date. If it comes to pass, July will see production begin on dual-motor models. (Those carry a price of $54,000, though reservation holders can spring for the AWD setup for an extra $5k.)

The earliest possible delivery of a $35,000 base model under this scenario is September, though Musk has, in the past, said deliveries will start by the end of 2018. A late four-quarter delivery date for the first base cars seems likely.

Problems and delays in getting the Model 3’s production up to speed, endlessly detailed on these pages, mean other automakers are getting a headstart. In 2017, Chevrolet sold 23,297 similarly priced, 248-mile Bolt EVs in the United States. Another 4,375 were sold in the first quarter of 2018. A longer-ranged (225-plus mile) version of the recently revamped Nissan Leaf arrives for the 2019 model year, and the Hyundai Kona Electric will offer up to 250 miles of range.

Because of the wait, it’s likely that base Model 3 buyers won’t be able to benefit from the full federal tax credit. Tesla admitted in an SEC filing that it expects to sell its 200,000th electric vehicle this year, meaning the $7,500 credit gets cut in half for the following six-month period, then halved again.

While GM and Nissan aren’t expected to last all that much longer before hitting the 200k mark, there will be a period where Bolt and Leaf buyers get an added perk from Uncle Sam. Hyundai won’t have to worry about that for a while.

[Image: Maurizio Pesce/Flickr]

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34 Comments on “An Update on the Everyman’s Car...”


  • avatar
    incautious

    Tesla can’t make money on a $55,000 model 3. How are they going to make it on a 35K car. Commodities cost are rising, and the underrated humans look like they will be around for some time.

    • 0 avatar
      vvk

      Says who? Can you post your sources, please.

      • 0 avatar
        Art Vandelay

        Are you claiming Tesla is in fact profitable? If that is your claim it is in fact you VVK that should cite a source or two. Bet you can’t.

        • 0 avatar
          mcs

          Tesla makes a profit on each individual cars, but not a profit as a company. What they make on the cars gets sucked up by the development costs and stupid mistakes.

          • 0 avatar
            DeadWeight

            “Tesla makes a profit on each individual cars, but not a profit as a company…”

            They are losing massive amounts of money at an accelerating pace, and burning through cash at a torrid pace, as well, to subsidize their ongoing operations.

            “May 2, 2018 … Tesla started 2018 with a record quarter in a number of ways. … Tesla burned through more money than ever, turning that revenue figure into a nearly $785 million loss.”

            For Q1 18, They lost 3.35 per share, and are now on track to burn through at least 3.18 billion dollars in cash for FY 2018 –and it would be worse if reported under a GAAP vs Non-GAAP basis.

          • 0 avatar
            Art Vandelay

            I would argue they are allowing their core model to “wither on the vine” The model S has been around 6 years now with minimal changes and nothing new on the horizon. We’re it judged by the same standards as other cars in its price range we’d be using phrases like “long in the tooth”

          • 0 avatar
            Art Vandelay

            Let me guess… They’ll “make it up on volume”.

        • 0 avatar
          vvk

          > Are you claiming Tesla is in fact profitable?
          > If that is your claim it is in fact you VVK
          > that should cite a source or two. Bet you can’t.

          I am not claiming that. I am simply saying that the margin on the $55000 M3 is not necessarily negative. The company is making huge capital investments, but it does not mean that the margin on the long range premium package M3 is negative. The gross margin may not be 25% yet due to production ramp up but who said that it is negative?

    • 0 avatar
      dukeisduke

      Looks like you’ve kicked the fanboi hornet’s net.

  • avatar
    Sub-600

    Musk is a genius. He knows that the CUV craze will eventually die down and that cars will be back in style, by that time the Model 3 should just start showing up on the streets. Pure intellect. Musk is playing chess while the rest of us are looking for hidden pictures in Highlights magazine.

  • avatar
    DeadWeight

    With one Tweet, PT Elon/Enron conceded what anyone with an IQ above 100 already figured out:

    Tesla not only has no realistic chance of turning a profit in the next decade by trying to scale up, but they’re cash burn rate defines them as a literal money-destroying black hole (at last count, their cash-burn rate is 2 billion USD annually and likely to rise), and even IF they could field relatively high quality, efficiently produced vehicles in reasonably large numbers (they can’t), their situation is worsening at a precipitous rate.

    Tesla is toast.

    They don’t even stand a reasonable chance of being acquired by any respectable company with significant resources now, as the big boys are all caught up in the EV space, unlike 5 years ago, and Tesla is train wreck of a company in terms of financials, manufacturing processes, and distribution network

    p.s. The Model 3 is rolling dumpster fire of a car in terms of quality, ergonomics, fit/finish, and may even be unsafe at any speed.

    • 0 avatar
      Rick Astley

      While I am loath to respond directly to your comment based on observations of past postings, I must point out one glaring falsehood in your statements.

      The Model3, once stopped, is a safe vehicle. So at the speed of 0 it represents no bigger risk than any other vehicle and or dumpster (barring the Corvair, of course, which still posed a fire risk while parked).

  • avatar
    dukeisduke

    A Tesla Model 3 in every garage, and a free-range, non-genetically-modified, antibiotic-free, humanely executed chicken in every pot.

  • avatar
    mcs

    I wonder how long they’d have the sales to support a 5k rate? I think the Mercedes EQC is going to hit them hard. They’ll have a tough time selling against it since it will still have the subsidy, won’t have a Cozy-Coupe-with-Ipad interior, and is a CUV which I’ve heard are kind of popular these days.

    At the high-end, you might be able to get a stripped down Mission E with subsidy under $70k. In my state I might be able to get a base for $65k. Model 3 or Porsche… uhhh – that’s not a difficult choice – at least for me.

    Porsche is installing those 350kW chargers already and they’re putting them at gas stations, so they might actually be able to compete with the supercharger network by the time the car ships.

    It’s going to be tough going for Tesla, that’s for sure.

  • avatar
    slavuta

    they should of sent all tesla cars into space

  • avatar
    eggsalad

    In other news, Ford would rather sell you an F-150 Platinum Crew Cab than a regular-cab long bed XL.

    Truck factories are running at or near full capacity. Every XL or W/T or Tradesman they sell means a loss vs. building another Denali.

    Look at the rebates on American trucks. The rebates for regular-cab trucks are meager at best. For the average buyer, it’s not significantly more expensive to buy an extended cab truck, figuring pricing after rebates.

  • avatar
    eggsalad

    Looks like a 4:3 scale Volvo Amazon onto which tailfins were added.

    I’ll show myself out now.

  • avatar
    St.George

    I wish them well. Tesla have (from scratch) built a brand that is ‘socially acceptable’ worldwide & that employs folks here in the US. It’s not going to be easy navigating through to profitability but I for one hope they do.

    The US used to be a country where ambition and drive were applauded, now it seems everyone wants anyone who is successful to be dragged down to their level. Sad.

    • 0 avatar
      vvk

      This has been what they teach in school here. Kids are brainwashed with this idea from elementary school. Everybody gets a medal these days.

      Also, it seems like a lot of these negative articles are by Canadians who may not wish an American company well.

      • 0 avatar
        Art Vandelay

        What new tech did the bring. We do applaud innovation, but at the end of the day they don’t bring much new to the table. I’m tempted to call them the Apple of the car business but Apple did revolutionize the smart phone experience, has great build quality, and oh yeah, profit

        • 0 avatar
          St.George

          Perhaps developing a range of desirable electric vehicles with decent range and a network of charging stations from scratch isn’t enough for you? I think that this is something more worthwhile than developing handheld devices that are rapidly turning people into lazy, self-centered zombies.

          I’m not a Tesla fanboy and can’t see myself affording one anytime soon, but I hope they do well.

  • avatar
    junkandfrunk

    “…will cause Tesla to lose money and die.” As opposed to their current strategy, which is lose money and die?

  • avatar
    shipping96

    Ya’ll are going to look just as foolish as TTAC did after being known for their “Tesla Deathwatch”.

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