Tesla’s Model 3 is already quite successful based on many metrics, but Tesla is still failing on arguably the most important promise: a starting price of $35,000.
Is the standard Model 3 still coming and where is it now?
The price has always been one of the biggest features of the Model 3.
It was part of Elon Musk’s original “secret master plan” for Tesla: make a compelling mass-market all-electric vehicle.
With a base price of $44,000 before incentives, the Model 3 is not quite there yet.
The $35,000 version is supposed to be enabled by a smaller battery pack and an interior with fewer features and different materials.
It was always part of the plan.
Back in the summer of 2017, we reported on Tesla’s Model 3 battery pack architecture and the automaker already had plans for the standard battery pack at the time.
It was supposed to be available just a few months after the higher-end versions of the car, but then production hell happened and the company had to revisit its priorities and focus on ramping up production in a sustainable way.
Over a year later and Tesla still lists the standard battery pack as being “4 to 6 months” away.
Tesla fans and reservation holders are still hopeful that the base version of the Model 3 is still coming, while Tesla detractors say that it will never happen.
We got a rare update on Tesla’s effort to bring the vehicle to market last week when Musk announced a round of layoffs at Tesla.
The CEO said that these cuts, along with “manufacturing engineering improvements”, are “crucial” to Tesla making the base version of the Model 3:
“Higher volume and manufacturing design improvements are crucial for Tesla to achieve the economies of scale required to manufacture the standard range (220 mile), standard interior Model 3 at $35k and still be a viable company. There isn’t any other way.”
Musk didn’t offer any clear timeline, but he made it known that Tesla would need the new version of the car to maintain demand in the US after the next reduction of the federal tax credit coming in Q3 2019:
“Moreover, we need to continue making progress towards lower priced variants of Model 3. Right now, our most affordable offering is the mid-range (264 mile) Model 3 with premium sound and interior at $44k. The need for a lower priced variants of Model 3 becomes even greater on July 1, when the US tax credit again drops in half, making our car $1,875 more expensive, and again at the end of the year when it goes away entirely.”
The CEO also said that the $44,000 Mid-Range variant, which is currently only available in North America, is going to come to all markets by May.
I am confident that the Model 3 with standard battery pack is still coming.
Tesla not only needs it to maintain a high demand for Model 3 and accelerate EV adoption, but I think they also need to deliver on this just to prove that they can keep their promise.
I think we might still see it happen in steps, so don’t be surprised if Tesla introduces a ~$40,000 version of the Model 3 before the $35,000 version.
The standard interior with textile seating and fewer premium features could come before the new battery pack.
I think it could become available in North America in the next 2-3 months.
As for the base battery pack, I think that Musk would like to have it available by July based on the comments above.
Tesla was aiming for battery cost to be at $100 per kWh by the end of last year. It’s unclear if they achieved that, but I think it is required for them to deliver on the base battery pack.
Overall higher production is also going to be needed and we have yet to see any evidence of Tesla maintaining more than 5,000 units per week.
Therefore, they still have a way to go, but I’m still confident it’s going to happen.
What do you think? How confident are you about the $35,000 Model 3 hitting the market? Let us know in the comment section below.
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