Almost Like a $35,000 Car…

Steph Willems
by Steph Willems

Thus far in 2019, price changes at Tesla have occurred with roughly the same frequency as storm warnings in the Northeast. The electric automaker has now dialed back pricing on its Model 3 for the second time this (very young) year, and the third time in recent months, with the company’s CEO claiming the long-promised $35,000 sedan is now here — in a way.

Fancy math required.

Actually, the Model 3’s entry price has seen almost continuous alterations, the most notable being after the late-2018 introduction of a Mid Level version with 260 miles of range. It’s this vehicle which Tesla just pared back by $1,100, putting its entry price at $42,900.

But wait! There’s still a halved federal tax credit for buyers who stake their claim before July 1st, so knock another $3,750 off that sticker. Thus, $39,150 becomes the Model 3’s floor for the next four and a half months. Unfortunately, as Tesla continues the annoying habit of factoring anticipated gas savings into its pricing, we’re left with statements like this:

Model 3 starting cost now ~$35k (after ~$8k of credits & fuel savings) https://t.co/46TXqRrsdr

— Elon Musk (@elonmusk) February 6, 2019

Of course, drivers of gasoline-powered cars can also save on pump costs — by keeping a bicycle handy and ignoring the freshly purchased vehicle sitting in their driveway. It’s a weird way of calculating price, one practiced by no other player in the EV field.

Anyway, the dream of a Model 3 that actually costs $35,000 remains alive, with Musk saying during a recent earnings call that the base model should appear by summer. That means a full three-year wait for those lured in during the model’s launch in summer, 2016.

In the meantime, Tesla remains on a cost-cutting kick, purging employees in a bid to boost profitability. The newly reduced Model 3 price is a result of the company’s decision to axe its customer referral program, Tesla claims.

Studies have shown Tesla employs far more workers to build fewer vehicles than “legacy automakers,” hurting its balance sheet, and the push is on to achieve economies of scale necessary to build a cheaper Model 3 variant.

During the Q4 2018 earnings call, Bloomberg reports, Musk stated, “Getting those costs down — variable costs and fixed costs — is what allows us to lower the price and be financially sustainable and achieve our mission of environmental sustainability. We have to be absolute zealots about this, there’s no question.”

[Image: Tesla]

Steph Willems
Steph Willems

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  • Incautious Incautious on Feb 07, 2019

    with the huge hike in price at a supercharger, it can cost more to fuel up a tesla than a fuel efficient ICE

    • HotPotato HotPotato on Feb 09, 2019

      Superchargers aren't for routine fueling, they're for road trips. The point of instituting a charge there was to stop the a-holes who did all their routine charging there instead of charging at home on their own dime.

  • Arthurk45 Arthurk45 on Feb 07, 2019

    Musk's "fuel costs savings" are bogus in a variety of ways. Number 1 : a gallon of gas contains a significant road tax, which is not a fuel and which electric cars will have to pay, probably sooner rather than later. Gas prices are fairly consistent across the country, but electric costs vary wildly - people in California can pay 4 times more than folks in the midwest. And mileage for an electric car varies widely with the seasons - figure 40% or more worse mileage in the cold. Also, those who can't recharge at home and have to use the Superchargers (or live in NY, HAwaii or parts of California) will pay more for fuel than any gas powered vehicle. Tesla cars also lose their current $3750 govt tax credit in just a few months,and all credits by the end of 2019. Musk is not only a conman, he is quite stupid, actually.

    • SCE to AUX SCE to AUX on Feb 07, 2019

      You're improving. Only half of what you said here is wrong.

  • The Oracle Well, we’re 3-4 years in with the Telluride and right around the time the long term durability issues start to really take hold. This is sad.
  • CoastieLenn No idea why, but nothing about a 4Runner excites me post-2004. To me, they're peak "try-hard", even above the Wrangler and Gladiator.
  • AZFelix A well earned anniversary.Can they also attend to the Mach-E?
  • Jalop1991 The intermediate shaft and right front driveshaft may not be fully engaged due to suspected improper assembly by the supplier. Over time, partial engagement can cause damage to the intermediate shaft splines. Damaged shaft splines may result in unintended vehicle movement while in Park if the parking brake is not engagedGee, my Chrysler van automatically engages the parking brake when we put it in Park. Do you mean to tell me that the idjits at Kia, and the idjit buyers, couldn't figure out wanting this in THEIR MOST EXPENSIVE VEHICLE????
  • Dukeisduke I've been waiting to see if they were going to do something special for the 60th Anniversary. I was four years old when the Mustang was introduced. I can remember that one of our neighbors bought a '65 coupe (they were all titled as '65 models, even the '64-1/2 cars), and it's the first one I can remember seeing. In the '90s I knew an older gentleman that owned a '64-1/2 model coupe with the 260 V8.
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