Tesla Model S Under Wraps

Tesla Model S Under Wraps

Tesla Motors CEO Elon Musk has long stated that the target price for the Gen 3 Tesla (Model E) is $35,000.  However, Musk is vague on what that price implies.  Are we to take into account inflation since Gen 3 won't launch until 2017?  Is that an after tax credit price?  Is that a base MSRP price?

That's a $50,000 Up Sell

That's a $50,000 Up Sell

Starting from the $35,000 baseline (let's assume that doesn't include the federal tax credit since Musk previously stated that Tesla isn't counting on Gen 3 receiving the credit come 2017), coupled with the fact that almost nobody buys a base Tesla Model S, Value Walk puts an Average Selling Price on Gen 3 of $45,000-$50,000.

To us, that figure seems on target.  Sure, Tesla will offer a $35,000 Gen 3, but we suspect that only a few percent of sales will be for that base model, which likely won't have Supercharger access and some features that most car buyers will be looking for.

Stepping up to a Gen 3 with Supercharger access and range of 200 miles will probably be a pre-packaged option and will probably put the vehicle's price closer to$45,000.  Add on a few more extras (tech package, sport suspension, etc) and your likely touching $50,000 or more.

Tesla knows how to up sell.  It has proven that with the Tesla Model S.  We'd be dead wrong to assume that Tesla doesn't expect the same to be true of Gen 3.

So, while a $35,000 Gen 3 may soon exist, it won't be the Gen 3 that most buyers buy.

Source: Value Walk