Tesla stops selling $35,000 Model 3 with new 2021 model year refresh

Tesla has stopped selling the $35,000 version of the Model 3 altogether — which has been somewhat elusive ever since its launch — with the new 2021 model year refresh.

Long before ever delivering a Model 3, CEO Elon Musk promised that it would be the electric car for the masses with a price point starting at $35,000.

While Tesla achieved mass production of the Model 3, that $35,000 price point has remained elusive.

That price point was repeatedly mentioned by Tesla over the years and in 2019, the automaker finally launched the Model 3 Standard Range version for $35,000 — delivering on a promise made long ago and proving the skeptics wrong.

However, the automaker moved away from the product just a few months after launching it.

It stopped listing the $35,000 version of the Model 3 or even producing it, but in order to still be able to say that it is making a $35,000 Model 3 as promised, they would sell a Model 3 Standard Range Plus (now $38,000) and software-locked some features with a $3,000 discount:

“Given the popularity of the Standard Plus relative to the Standard, we have made the decision to simplify our production operations to better optimize cost, minimize complexity and streamline operations. As a result, Model 3 Standard will now be a software-limited version of the Standard Plus, and we are taking it off the online ordering menu, which just means that to get it, customers will need to call us or visit any one of the several hundred Tesla stores.”

That “off-the-menu” $35,000 Model 3 has been available to Tesla buyers for the past year and a half and some owners have indeed gone through that process and bought a Tesla Model 3 for $35,000.

Now Electrek has learned that Tesla has decided not to do it anymore for new Model 3 vehicles — at least at this time.

Sources familiar with the matter told Electrek that Tesla informed its staff that they weren’t allowed to “downgrade” new 2021 Model 3 vehicles to “Standard Range” and sell them for $35,000.

They are still allowed to software-limit features on 2020 Model 3 Standard Range Plus vehicles that are still in inventory and sell those to customers as Model 3 Standard Range for $35,000, but not the new 2021 Model 3, which comes with new features.

Electrek’s Take

This “off-the-menu” thing has always been weird to me.

Obviously, Tesla doesn’t want to sell that version of the vehicle, otherwise, it would be listed as an option on its configurator like any other version.

Why though? I can’t say for sure, but to me, it looked like they just wanted to make the point that they actually sold a $35,000 Model 3 as promised.

Now they are walking away from that too?

However, they could change this in the future.

It could be that demand is high right now for the 2021 Model 3 and Tesla doesn’t want to sell them for a lower gross margin as the software-limited Standard Range until they hit lower demand for it.

For what it’s worth, I could see them allowing downgrades again on new Model 3s at some point next year.

Normally, we would have asked Tesla about the situation to get some clarity, but as we previously reported, they don’t have a press relations department anymore.