Photo: Tesla
Tesla opened the order book for the refreshed Model 3 in January, but the production doesn't appear to ramp as fast as necessary. Combined with an off-the-charts demand, this means not only that deliveries are pushed back but also that price hikes make the Model 3 Highland more expensive than the Model Y.
Tesla fans and prospective buyers have eagerly awaited the launch of the refreshed Model 3 in North America. The redesigned EV, which arrived in Europe, Asia, and Oceania last September, brings many technological and comfort improvements over the outgoing model. From the beginning, it was clear that the demand for the new model was strong, overwhelming production capacity at Tesla's Fremont factory.
As is often the case with new models, the initial production pace is not very high. Tesla needs time to fine-tune the production line for the new parts and manufacturing processes. However, many expected things to go much smoother with the Model 3 Highland. Tesla's Chinese gigafactory had no problem ramping up production, especially as the refreshed model is not much different from the one it replaced. However, Fremont is not Giga Shanghai, and things aren't going as fast as Tesla wanted.
This has led to the delivery of the Model 3 RWD being pushed from January-February to February-March and the Model 3 Long Range AWD to April-May. This makes me believe the latter is the most in-demand, with the Model 3 RWD base version much less compelling. This is further confirmed by Tesla's latest move, which was to raise the price of the AWD model by $500. Not that the Long Range variant was cheap to begin with. This is the second time Tesla hikes the Model 3 LR price after adding $1,000 on February 4.
Now, the price seems to chase the potential buyers away. Indeed, at $47,490, the Model 3 LR is only $500 more expensive than the Model Y LR. However, Model Y qualifies for the $7,500 tax credit, which means you can get it at $40,490. And if you take delivery of a Model Y LR from Tesla's inventory, you can have it for $36,650 with the tax credit. That's almost $11K less than the Model 3 LR. Heck, you can even buy a Model Y Performance for $44,990, including the tax credit.
One of the reasons why Tesla doesn't seem willing to sell you a Model 3 is because the production ramp at the Fremont factory is terrible. The situation is significantly better at Giga Shanghai. However, Chinese customers also complained about the Model 3's price being hard to justify compared to the Model Y. The fact that the Model 3 RWD doesn't seem to be affected by the price increase or delayed delivery indicates that people are not eager to get the 260-mile Model 3.
As is often the case with new models, the initial production pace is not very high. Tesla needs time to fine-tune the production line for the new parts and manufacturing processes. However, many expected things to go much smoother with the Model 3 Highland. Tesla's Chinese gigafactory had no problem ramping up production, especially as the refreshed model is not much different from the one it replaced. However, Fremont is not Giga Shanghai, and things aren't going as fast as Tesla wanted.
This has led to the delivery of the Model 3 RWD being pushed from January-February to February-March and the Model 3 Long Range AWD to April-May. This makes me believe the latter is the most in-demand, with the Model 3 RWD base version much less compelling. This is further confirmed by Tesla's latest move, which was to raise the price of the AWD model by $500. Not that the Long Range variant was cheap to begin with. This is the second time Tesla hikes the Model 3 LR price after adding $1,000 on February 4.
Now, the price seems to chase the potential buyers away. Indeed, at $47,490, the Model 3 LR is only $500 more expensive than the Model Y LR. However, Model Y qualifies for the $7,500 tax credit, which means you can get it at $40,490. And if you take delivery of a Model Y LR from Tesla's inventory, you can have it for $36,650 with the tax credit. That's almost $11K less than the Model 3 LR. Heck, you can even buy a Model Y Performance for $44,990, including the tax credit.
One of the reasons why Tesla doesn't seem willing to sell you a Model 3 is because the production ramp at the Fremont factory is terrible. The situation is significantly better at Giga Shanghai. However, Chinese customers also complained about the Model 3's price being hard to justify compared to the Model Y. The fact that the Model 3 RWD doesn't seem to be affected by the price increase or delayed delivery indicates that people are not eager to get the 260-mile Model 3.
This is because of supply problems caused by the Model 3 production pause and slowdown at the Fremont factory due to the Highland upgrade.
— Troy Teslike (@TroyTeslike) February 14, 2024
I wrote about this before. See #1 here: https://t.co/CPjqfmCwQP https://t.co/wiTBijno6x
Google News