Thursday, May 24, 2018

TESLA MODEL 3 Still Feels More “LUXURY” than “MASS-MARKET” E-Sedan

Last year, electric car manufacturer Tesla took its great leap towards realizing an ideal: that of an electrically-powered automobile well within the reach of the everyday consumer. Their means to achieve that end was a new car, the Tesla Model 3. With a basic price of $35,000 it was the cheapest an electric automobile has ever gotten. Despite a slow start at its delivery of preordered Model 3’s, Tesla seems to finally be picking up its production pace this year. But a study of all purchased cars thus far is telling a different story: nobody wants a $35K Model 3.
CNN reports that Tesla’s Model 3 electric sedan, far from becoming gradually accepted as a “mass market” vehicle still finds itself with its brother models to be something of a steep luxury item. Despite the still in-effect basic price of $35,000 it seems that those who have order and gotten their own Model 3 actually paid far more than the minimum, all to avail of the numerous additional perks that could be fitted to their vehicles. Not helping now is the fact that Tesla CEO Elon Musk recently announced a hi-spec Model 3 variant worth $78,000, the new sought-after e-car.
Why is nobody bothering with the default $35K Model 3 introduced since July of last year? Apparently Tesla is utterly counting on customers always paying for more add-ons to their new car that would ratchet up the price further. Musk himself mentioned on his Twitter page this week that production output for the Model 3 first needs to hit 5,000 cars a week, and then stay that way 3-6 months, before the company could weather the shipping costs for a baseline unit. In his words, “Shipping [minimum] cost Model 3 right away [would] cause Tesla to lose money & die.”
So there it is. Tesla needs to first bring their Model 3 production line up to full output first, and to do that they need the cash inflow from the feature-added unit sales. Marketing the unmodified Model 3 that costs “only” $35K has fallen to a low priority with the company, and in fact if any customer did take the plunge and order a no-frills Model 3, they might be waiting for their unit to be delivered by year’s end.
Favored additions to the basic Tesla Model 3 that can ramp up prices include a $1,000 repaint job from the default black, $1,500 for high-performance wheels, and $5,000 for Tesla’s “Enhanced Autopilot” which they have been promoting for the car.
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