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Tesla’s delays in achieving Model 3’s $35,000 price might open the door to other electric cars

We have often discussed how electric cars in the $30,000 to $40,000 range weren’t on par with the Tesla Model 3, which led us to believe that those vehicles will have a tough time competing in the segment as the Model 3 becomes more widely available.

But with Tesla’s recent changes in the timeline for different and less expensive configurations, it has become clear that the Model 3 will not be available at a price point nowhere near $35,000 for almost the entire year, which could have a major impact in the EV market.

Tesla received close to 500,000 reservations for the Model 3, which is impressive no matter how you look at it, but it’s not clear how many are only buying the least expensive version starting at $35,000.

A previous survey showed that the majority are actually budgeting closer to $50,000 for the Model 3.

But it still leaves a significant number of Model 3 reservation holders counting on the $35,000 base price.

In the US, some of them are even stretching their budget and counting on the $7,500 tax credit in order to buy the Model 3.

It’s them who are most affected by Tesla’s change last week that pushed standard battery pack production to ‘late 2018’. The standard battery pack is essential for Tesla to reach the $35,000 price point since the current ‘Long Range’ battery pack in production adds a $9,000 premium on the vehicle.

We have been trying to build a new more accurate model of the impact of Tesla’s changes to the Model 3 ramp on the availability of the federal tax credit for Tesla buyers.

At the moment, it looks like no one buying a Model 3 with standard battery pack will have access to the full $7,500 tax credit, but they could still get a partial credit if there are no more delays, which is a big ‘if’.

We think it opens the door to EVs like the Chevy Bolt EV, the Hyundai Ioniq EV, and especially the new Nissan Leaf, which is expected to be available in higher volumes.

Nissan reportedly delayed several features that would have made the next-gen Leaf competitive with the Model 3 from the model year 2018 to 2019.

But those features will come at a higher price while the vehicle’s current $30,000 starting price before the tax credit might start to look good against the current $49,000 starting price of the Model 3.

Buyers will start asking themselves if the differences in range and features are worth the $19,000 price difference or if the wait and losing the full tax credit is worth it.

Let’s take an informal poll for Model 3 reservation holders to see if it’s the case.

If the answer is yes, then what other electric car you think is the most attractive now that the Model 3 standard battery pack is delayed.

Another thing that can make a difference is the availability of lease programs (and subscription program when it comes to the Ioniq), which Tesla has yet to make available for the Model 3.

For the Chevy Bolt EV, we have seen prices between $220 and $300 per month. You can always check with your local dealers for inventory. Nissan recently launched a lease program starting at $229 per month (check with your local Nissan dealer for Leaf inventory.)

Automakers apply the federal tax credit on their end in order to reduce the cash down or the monthly payments with those programs, but Tesla generally doesn’t offer a lease program early in the production ramp-up of a new vehicle.

Electrek’s Take

The way I see it, I think many Model 3 reservation holders actually want a Model 3 and not any other electric vehicle, or at least other vehicles currently on the market.

Things like Tesla’s mission, the Supercharger network, the promised of fully self-driving with future software updates, are all things that are unique and reservation holders are buying into it.

But I also think that many people simply need a vehicle and the timing doesn’t necessarily align with Tesla’s delayed timeline. Those people will have to find other options and that’s what could boost sales of other EVs in the $30,000 to $40,000 range.

What do you think? Let us know in the comment section below.

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