Electric Cars

Is the $35,000 Tesla Model 3 finally upon us? Well, YMMV

Tesla's Elon Musk tweeted that the Model 3 is now technically available for under $35,000, but as the saying goes, your mileage may vary.

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The 2019 Tesla Model 3 now costs as little as $35,000, according to a tweet on Wednesday by CEO Elon Musk, the target figure he -- and investors -- have been eyeballing since the electric vehicle was first announced. A price cut of $1,100 was all it took to get there. 

Mission accomplished, right? Not exactly. According to Musk, that price point not only includes tax credits -- which were recently halved on the federal level after Tesla reached a sales milestone -- it also includes estimated fuel savings. That isn't just a lot of fine print, that's some creative math from the enigmatic executive. 

According to Tesla's own Model 3 ordering page, the least expensive Model 3 you can now buy, a rear-wheel drive model with midrange battery -- starts at $34,850 -- that's $42,900 for the car, with $3,750 in incentives and $4,300 in fuel savings. Naturally, as the cost of both gas and electricity vary moment to moment and location to location, savings can vary significantly. 

As some critics have pointed out, a more valid comparison of cost savings would be to pit the loaded costs of both vehicles against each other. In other words, the more accurate calculus would be to add the cost of electricity and insurance to a base Model 3 (with tax incentives) versus a comparable internal-combustion automobile including its fuel and insurance costs.

In other words, YMMV.

According to Tesla fan site Electrek, that $1,100 price cut comes in part from savings realized by stopping its customer referral program, which had proven too costly.

Tesla has a long history of having significantly more volatile model pricing strategies than other automakers -- the company is constantly tweaking its math right down to its vehicles' MSRPs in order to find sustained profitability. In fact, this is the Model 3's second price cut this year.

So, is this the $35,000 Model 3 that Musk himself has been promising us since 2015? No. But it's an $1,100 step in the right direction, and that's significant. 

For the moment, at least, Tesla's configurator still says "Standard Battery available in 4-6 months." Furthermore, Musk's tweets seems to suggest Tesla is still pushing to develop a $35,000 Model 3 without incentives: "We're doing everything we can to get there. It's a super hard grind," he said.

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