Photo: Tesla.com screenshot
Back in 2016, when the Model 3 was first revealed, it was touted as the entry-level electric sedan that could be had for as little as $35,000. That was a staggeringly low price for an EV at the time, particularly one the size and with the capabilities of the Model 3.
Fast forward five years, and the cheapest Model 3 you can now buy is the $39,990 Standard Range Plus. However, you only need to go back a few months for the same model to cost $3,000 less, which means the most affordable Model 3 has seen an eight percent price increase over the last 100 days.
Surely, you'll say, there is a very good reason behind the company's constant price-increasing tactic, and while we're sure there is, it's not as if Tesla is going to share it with the rest of the world. There could several explanations, or maybe even a combination between several of them.
On the one hand, we know the automotive industry faces a shortage of raw materials and sub-assemblies, which means they've either become unavailable or their prices have increased as well. Tesla is known for trying to keep as much of the production process in-house—and situations like this one prove it's right to do so—but it can't possibly take care of every production stage in its entirety, which means it's not immune.
On the other hand, it could be a natural answer to the market which sees very strong demand for the Model 3 and Model Y. Tesla already sold out its entire production for the second quarter with nearly half of it left. So even though a lot of people won't agree with the practice, it makes sense from the business point of view to try and capitalize on the high demand.
The fact Tesla slowly moved away from the $35k promise shows it was nothing more than a marketing line meant to show the company's ability to threaten the mainstream segment, too, not just the premium one. And since most people seemed to prefer the 3 in its higher trims anyway, which also happen to be the ones that make Tesla more money, getting rid of the entry-level version was an easy decision to make, even if some might see it as breaking a promise.
Well, the real question here is when and where will all this stop? We could expect the prices to stabilize—or maybe even drop if you're the kind that likes to feed on air—once the company opens up a few more plants and manages to bring up the supply to the demand levels. However, that's only true if the cause behind the price hike is the latter of the two we mentioned. If it's the former, then it's really out of Tesla's hands, and predicting what will happen becomes a lot more difficult and speculative.
What we do know, though, is that if you want to buy a Tesla Model 3 or Model Y in the U.S. now and have it delivered sometime in the third quarter, apparently (unless you’re an MMA fighter), this is what you have to pay: Model 3 Standard Range Plus, $39,990; Model 3 Long Range AWD, $48,990; Model 3 Performance, $56,990; Model Y Long Range AWD, $51,990; Model Y Performance, $60,990.
Surely, you'll say, there is a very good reason behind the company's constant price-increasing tactic, and while we're sure there is, it's not as if Tesla is going to share it with the rest of the world. There could several explanations, or maybe even a combination between several of them.
On the one hand, we know the automotive industry faces a shortage of raw materials and sub-assemblies, which means they've either become unavailable or their prices have increased as well. Tesla is known for trying to keep as much of the production process in-house—and situations like this one prove it's right to do so—but it can't possibly take care of every production stage in its entirety, which means it's not immune.
On the other hand, it could be a natural answer to the market which sees very strong demand for the Model 3 and Model Y. Tesla already sold out its entire production for the second quarter with nearly half of it left. So even though a lot of people won't agree with the practice, it makes sense from the business point of view to try and capitalize on the high demand.
The fact Tesla slowly moved away from the $35k promise shows it was nothing more than a marketing line meant to show the company's ability to threaten the mainstream segment, too, not just the premium one. And since most people seemed to prefer the 3 in its higher trims anyway, which also happen to be the ones that make Tesla more money, getting rid of the entry-level version was an easy decision to make, even if some might see it as breaking a promise.
Well, the real question here is when and where will all this stop? We could expect the prices to stabilize—or maybe even drop if you're the kind that likes to feed on air—once the company opens up a few more plants and manages to bring up the supply to the demand levels. However, that's only true if the cause behind the price hike is the latter of the two we mentioned. If it's the former, then it's really out of Tesla's hands, and predicting what will happen becomes a lot more difficult and speculative.
What we do know, though, is that if you want to buy a Tesla Model 3 or Model Y in the U.S. now and have it delivered sometime in the third quarter, apparently (unless you’re an MMA fighter), this is what you have to pay: Model 3 Standard Range Plus, $39,990; Model 3 Long Range AWD, $48,990; Model 3 Performance, $56,990; Model Y Long Range AWD, $51,990; Model Y Performance, $60,990.
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