Tesla trims Model 3 prices for the second time in as many months

[Shawn Knight]

The big picture: Tesla has lowered the cost of its Model 3 for the second time in as many months although the entry-level electric sedan still hasn’t reached the promised $35,000 base price. That's good news for both prospective buyers and Tesla as a company but the road to that mythical base price seems lengthy still.

The most affordable Model 3 now starts at $42,900 before incentives, the result of the most recent $1,100 price cut. After tax credits and estimated fuel savings, Tesla says the equivalent cost is $34,850.

Model 3 starting cost now ~$35k (after ~$8k of credits & fuel savings) https://t.co/46TXqRrsdr

— Elon Musk (@elonmusk) February 6, 2019

Tesla CEO Elon Musk said on Twitter that they’re doing everything they can to get to the $35,000 base price before incentives but added that “it’s a super hard grind.”

Tesla trimmed its vehicle prices at the first of the year to cushion the blow from losing part of its federal tax credit due to surpassing 200,000 EVs sold in 2018. The most recent cut came about as a result of Tesla discontinuing its customer referral program last month which had grown to be too costly to continue.

It’s the latest change to Tesla’s pricing structure. Last week, the EV maker launched Model S and Model X options with software-locked batteries. The new vehicles sacrifice 25 miles of range in exchange for an $8,000 price cut.

Image courtesy Aleksei Potov via Shutterstock

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https://www.techspot.com/news/78616-tesla-trims-model-3-prices-second-time-many.html

 

[Uncle Al]

Yeah but with the reported software "upgrade" reducing the mileage he's not helping his cause. I'm surprised some bright young hacker hasn't broken into it and did a re-write to ADD mileage. Of course it's limited by the battery capacity and life but I'm betting he hedged his bets and reduced the maximum by 15-25% and was going to upgrade to full capacity for a small fortune ....

 

[Steveb8189]

"After tax credits and estimated fuel savings"

What on earth does that mean? You can't bake fuel savings into the "price" of a car!

 

[iamcts]

Yeah but with the reported software "upgrade" reducing the mileage he's not helping his cause. I'm surprised some bright young hacker hasn't broken into it and did a re-write to ADD mileage. Of course it's limited by the battery capacity and life but I'm betting he hedged his bets and reduced the maximum by 15-25% and was going to upgrade to full capacity for a small fortune ....

Those are some pretty tinfoil hat claims with no sources to back them up.

Cars aren't getting lower mileage due to a software upgrade AFTER you bought the car. It gets software limited in the factory before it leaves the assembly line.

It helps Tesla reduce their costs, so people should be happy about this.

 

[netman]

"That's good news for both prospective buyers and Tesla as a company but the road to that mythical base price seems lengthy still."

The road to that mythical base price is not lengthy, rather washed off by a land slide! That will never happen and Tesla should acknowledge it before further embarrassment!

 

[wiyosaya]

"After tax credits and estimated fuel savings"

What on earth does that mean? You can't bake fuel savings into the "price" of a car!

Typical Musk/Tesla marketing drivel intended to hypnotize potential buyers into a zombie like state where they cannot resist buying the car.

 

[wiyosaya]

Those are some pretty tinfoil hat claims with no sources to back them up.

Cars aren't getting lower mileage due to a software upgrade AFTER you bought the car. It gets software limited in the factory before it leaves the assembly line.

It helps Tesla reduce their costs, so people should be happy about this.

It helps Tesla reduce their costs?

The model is bake in all the features. In other words, everything is in the car when it is manufactured.

Then, bake in a software modification that limits the charge on the battery to a total energy storage that amounts to an estimated 25-miles less than the actual miles you would get if the charge controller were to charge the battery to its full capacity. This probably cost Tesla more to implement (though not much more) than if the software were to allow a full charge on the battery.

Since everything needed to allow that extra 25-miles is already included in the car when it leaves the factory and when it leaves a Tesla dealer, there is no cost savings for Tesla if a buyer chooses the 25-mile less option for $8k less.

If the car were lacking the batteries required to add that extra 25-miles of range, then yes, absolutely it would be a cost savings for Tesla. However, this is not the case. The storage is there, so there is no cost savings - unless someone is willing to subscribe to Tesla's marketing ploy.

In my reality, there is absolutely no way that this kind of model can be construed to equate to a "cost savings" for Tesla especially when they buyer opts for the lower mileage option.

If anything, this is a marketing ploy to get buyers to spring for the extra $8k for a piddly (for the cost) additional 25-miles of range; in which case, Tesla's bottom line looks better, but IMO, the buyer has been duped into paying far too much extra for a built-in capability of the car.

And people should be happy about this?

 

[iamcts]

It helps Tesla reduce their costs?

The model is bake in all the features. In other words, everything is in the car when it is manufactured.

Then, bake in a software modification that limits the charge on the battery to a total energy storage that amounts to an estimated 25-miles less than the actual miles you would get if the charge controller were to charge the battery to its full capacity. This probably cost Tesla more to implement (though not much more) than if the software were to allow a full charge on the battery.

Since everything needed to allow that extra 25-miles is already included in the car when it leaves the factory and when it leaves a Tesla dealer, there is no cost savings for Tesla if a buyer chooses the 25-mile less option for $8k less.

If the car were lacking the batteries required to add that extra 25-miles of range, then yes, absolutely it would be a cost savings for Tesla. However, this is not the case. The storage is there, so there is no cost savings - unless someone is willing to subscribe to Tesla's marketing ploy.

In my reality, there is absolutely no way that this kind of model can be construed to equate to a "cost savings" for Tesla especially when they buyer opts for the lower mileage option.

If anything, this is a marketing ploy to get buyers to spring for the extra $8k for a piddly (for the cost) additional 25-miles of range; in which case, Tesla's bottom line looks better, but IMO, the buyer has been duped into paying far too much extra for a built-in capability of the car.

And people should be happy about this?

It costs Tesla less to procure the many different capacities of batteries that they need for their cars, and then engineering costs to physically integrate and software integrate all the the different batteries into their cars.

They could just have one or two SKUs for batteries, and then software lock them. That still provides the ability for consumers to unlock them down the road if they choose rather than having to go through an expensive battery swap.

From a manufacturing standpoint it's a good idea.

 

[wiyosaya]

It costs Tesla less to procure the many different capacities of batteries that they need for their cars, and then engineering costs to physically integrate and software integrate all the the different batteries into their cars.

They could just have one or two SKUs for batteries, and then software lock them. That still provides the ability for consumers to unlock them down the road if they choose rather than having to go through an expensive battery swap.

From a manufacturing standpoint it's a good idea.

Tesla could, but won't. It is more expensive because that means extra production costs maybe in the form of an additional production line for vehicles without the extra battery capacity.

It is common practice in most industries to build in everything and then restrict it by software switches. It is far cheaper to have all functionality inbuilt from the begging and then enable it by a software switch.

The point is that the batteries for the extra 25-miles are installed in every model that comes off the line.

Anyone buying a model without the extra 25-mile option can go to their dealer after they bought their car and, for a "fee" of $8k or perhaps more, get that extra 25-mile option enabled by the dealer flipping a switch in the car's software. They do not get a battery upgrade.

For your edification, have a look at this - https://www.techspot.com/news/78509-tesla-rolls-out-new-model-s-x-cars.html