I’ve seen some Tesla Model 3s milling about town, I even got the chance to sit in one the other day. But, I can’t help but wonder if we’ll ever actually see the every-man’s version of the car that has been promised for so long, the $35,000, 220-mile entry level Model 3. You know, the car that stole the news cycle for weeks following the 2016 unveiling of the Model 3?
I don’t want to talk about the Model 3 Long Range model, the only version in production, as the vehicle starts at $44,000. A full $9k above the base model starting price. I’m also not interested in talking about $78,000 dual-motor performance model announced last weekend. I want to talk base Model 3, the vehicle that is supposed to bring EVs to the masses.
With production, 1st you need achieve target rate & then smooth out flow to achieve target cost. Shipping min cost Model 3 right away wd cause Tesla to lose money & die. Need 3 to 6 months after 5k/wk to ship $35k Tesla & live.
— Elon Musk (@elonmusk) May 21, 2018
Well, that isn’t promising. Five-thousand costlier units per week for 3 to 6 months before shipping the base model Model 3? With Tesla aiming to hit 5k/week by the end of second quarter (June) that puts base Model 3 delivery into September at the earliest. That’s best case scenario asTesla has a long history of missing production targets. More realistically we won’t see base Model 3 delivery until late fourth-quarter.
The thing to remember through all of this is that Tesla doesn’t live in its own private ecosystem. While it fails to meet targets and bring an affordable EV to market, everyone else is getting a head-start. Nissan will bring its 225-mile version of the Leaf to market for the 2019 model year. Hyundai will offer 250-miles in its Kona Electric. And Chevrolet’s Bolt EV with its 248-mile range sold 23k units in 2017 and has already sold 4,375 in the first quarter of 2018. Add to that the Mercedes EQC and the Mission E to steal some of the costlier Tesla sales and the competition is only getting stronger. Plus existing manufacturers have the experience and expertise to keep cost under control.
Additionally, the wait is actually going to make the base Model 3 more expensive as buyers are running out of time to use the federal tax credit to its fullest. Tesla anticipates that it will sell its 200,000th vehicle later this year, when that happens the $7,500 tax credit will get cut in half for the following six-months. Then it will be halved again. GM and Nissan won’t hit the 200k mark for a little while yet, Hyundai has plenty of time.