Tesla Model 3 Promise Delivered Halfway

by Ernie Hernandez on July 30, 2017

Tesla Model 3

Tesla Model 3 meets delivery goal

Elon Musk said that the Model 3 would be delivered by the end of 2017. Very few, including me, believed him because Tesla had never delivered on time before. In fact the Model X was two years late. With the delivery of the first thirty customer cars Friday night, Musk is well ahead of schedule – at least for thirty lucky individuals.

The rest of the automotive world would call these production test vehicles. They built fifty cars and released thirty into the hands of employees. And maybe Tesla got the prospective owners to sign something acknowledging that the early delivery of these cars comes with some strings attached. But let’s face it – there are many that just need to be the first kid on the block with the shiny new toy and are willing to take the risk associated with such early adoption. I admit I was one of the first LEAF owners and have learned some valuable lessons from my experience. But based on previous company communications, these are all existing Tesla employees who will likely be forgiving of any tweaks needed as they get to show off their prizes well before most. Tesla also notes that early deliveries will go to existing Tesla owners as a reward for their loyalty. This approach is also likely to get more receptive welcomes from their new homes.

Tesla Model 3 doesn’t meet price goal

The number most talked about (other than the number 3) associated with the launch of this car is $35,000. As in, starting at $35,000 this will be the affordable Tesla. But, as is the case with all automobile makes, starting at does not equate to actual production. All initial production will come with the Long Range Battery option with a list price of $9,000. This takes it up to $44,000. But early owners will pay more than that as stated here in the information provided by the company in their Tesla Model 3 Reservations FAQ:

Will there still be a $35,000 Model 3 option?
Yes. Our first production Model 3 vehicles are preconfigured to ensure a smooth production ramp so that we can deliver more cars to more customers at a faster pace. The beginning configuration is a Long Range Battery with rear-wheel drive and premium upgrades, starting at $49,000. These vehicles come with three options for customization: wheel size, exterior color and Autopilot features.

Additional configurations, including the Model 3 with standard equipment for $35,000, will become available as production ramps, which we expect to be in November 2017.

In other words, all of the initial Tesla Model 3 production will have a starting price of $49,000 or more, depending on other premium upgrades. That is a forty percent premium to what many may have been expecting to pay. Tesla goes on to say that the Standard Battery option (as they put it) will start production in November 2017, so at least those looking for a more affordable Model 3 might be able to get one by the end of the year. Likely those will go to Tesla’s California owners. Still, there is no indication of how many of these entry level cars will be built, and even if they have the Standard Battery, many are likely to include other options that are likely to take the price into the $40,000 price range.

The standard battery will have a range of 220 miles and the Long Range battery will have a range of 310 miles. Years ago, early EV questionnaires found that a range of 150 miles would be satisfactory to EV owners. But this was when the LEAF,  the most popular EV at the moment, offered a range of only 73 miles. Now even the Chevrolet Bolt offers a range of well over 200 miles. This has become the new de-facto minimum, as defined by the car-buying public. And when that car-buying public can buy a true 200 mile range EV for $35,000 that seats five comfortably, we will see EV sales ramp up much more quickly.

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