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Tesla promises to continue selling $ 35k model 3, although it is claimed to order it



Two weeks ago, Tesla removed $ 35k Model 3 from their website, making it an "off-menu" item. When asked, they could not answer how long the model would be available – which caused many, including Electrek, to assume that this was an attempt to "kill" the car.

It seems that death will not stand out yet, as today during Tesla's Q1 earnings call, CEO Elon Musk made the promise that the 35k model 3 "is there and will remain there" for indefinite sales.

Releasing $ 35k Model 3 was a great success, the culmination of Tesla's original "secret master plan" from 2006.

However, since this announcement, several developments occurred. Many early customers had their delivery dates canceled without a fixed timeline when Tesla was due to retire and someone ended up canceling the order and buying another vehicle instead. After Tesla was strange about it for a while, they eventually de-listed the car on the website but stated that they would continue to sell by phone or in person. Finally, the first $ 35k model 3 shipments began last week only.

Today, Musk mentioned that customers do not need to "go through an obstacle" to order the Model 3 Standard Range, that all it takes is a business visit or a phone call. Despite this low additional barrier to buying, orders have been quite low for the Standard Range Model 3, according to Musk.

Instead of the $ 35k Standard Range Model 3, Tesla's website shows the $ 39.5k "Standard Range Plus" as its base model, which has autopilot and about 1

0% more range than the car's $ 35k Standard Range car. The $ 35k car also does not have access to various car features such as music flow, live traffic visualization navigation and heated seats. These are all software-limited features, and customers can "upgrade" anytime they want if they pay the difference in cost.

On the call, Musk stated that these features hit the "sweet spot" of good value to customers, and that the Standard Range Plus offers great value for money, compared to the $ 35k Standard Range car. Customers seem to agree that the order price of the $ 35k car is low.

Tesla also mentioned, both in today's earnings letter and on Tesla's Autonomy Day earlier this week, that a model 3 robot axle with full self-propelled hardware and a battery pack that can last for a million miles would cost "$ 38,000 to produce", which especially is higher than the price of a standard selection model 3.

Electrek's Take

First, a bit of a mea culpa from us. We said that Tesla had "killed" model 3 and maybe we exaggerated it. This was not just the opinion of one of us, but all of us at Electrek employees contributed to the editorial staff of this post, and we agreed that this move seemed like a clear attempt to kill the car, hence our headline.

In the article, "take", we mentioned that the car was not completely "dead", but since Tesla removed the model from the website and never had to produce the base model package or interior, it seemed that they had killed some intent to take the construction this car seriously.

We also asked Tesla to comment on how long model 3 would be available "by menu" and they refused to comment. We haven't heard anything on that page until today, when Musk said it would "stay" for sale.

As mentioned, Tesla has made similar moves in the past with other models, especially 40kWh Model S. Tesla used the same rationale for killing that model, saying that consumer demand was just not high enough. This was after a long period of time that Tesla tried much harder to sell higher models than 40kWh, convincing reservation holders to buy a 60kWh instead of getting the car faster etc.

So Tesla: If you really intend to sell this car Why does it make it harder, why de-list and tell people that nobody wants it? It sounds a lot like the reason you used to kill the 40kWh Model S, and we hope you won't use it as the final reason for killing this model. We would like to be proven wrong.

The fact is that although a call or store visit is a low barrier to entry, is a barrier to entry. A barrier that both mean that the consumer is unaware of the availability of the model when shopping around (since it is not listed) and which means that a customer must speak to a seller who will make a good case for why all the features are totally worth the extra ~ 12% increase in the price.

And that's true – Standard Range Plus seems like a pretty significant drop in value. When it first was announced, many people who held out for the base jumped $ 35k in the car and got a standard selection and it was worth finding the splurge. Especially since then was the comparison against any "standard" interior, which Tesla did not (and still has) not, and which did not provide Tesla's synthetic leather interior.

If Tesla can't sell $ 35k model 3 profitable yet, then they are in their right not to try to sell it very hard. But if so, why introduce it? Why not just wait until you can get the costs down? And how is everything going to trigger an even cheaper car, which Tesla has claimed to do in the future?

If this is just an honest attempt to keep his promise, but to lead customers in any way possible to buy higher-end cars, then it's not that dangerous. Companies will sell more expensive products, we can accept it as a reasonable proposal.

We just think that Tesla could have been less strange about this whole rollout – and repayment.

Anyway, the Standard Range car is still available, but perhaps on life support. We want to be sure to report further developments.


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