Price drops, stores close, and oh yeah, the $35,000 Model 3 has arrived

It's been a busy few days digesting all the moves Tesla made on Thursday when they also announced the arrival of the much anticipated $35,000 Model 3.  In the latest installment of "Plugged In", Alex from E For Electric and I discuss the busy day Tesla had yesterday, and try to make sense of it all.

The obvious headliner is that Telsa has finally delivered a $35,000 version of the Model 3 sedan. There's really no denying that this is great news for the company, as well as for the many thousands of loyalists that have been holding out for the promised $35,000 Model 3.

Surprisingly though, Tesla did a lot more than offer a lower priced Model 3; they slashed the pricing on the Models S & X, by $12,000 to $18,000, respectively, as well. The Model 3 is now available in six different variations as follows:

Model                             Range    Top Speed     0-60         Price Standard Range:            220         130 mph      5.6 Sec     $35,000

Standard Range Plus:   240         140 mph      5.3 Sec     $37,000

Mid Range:                     264          140 mph      5.2 Sec     $40,000

Long Range:                   325          140 mph       5.0 Sec     $43,000

AWD Long Range:        310           145 mph       4.5 Sec     $47,000

AWD Performance:      310           162 mph       3.2 Sec     $58,000

*Prices exclude Tesla's $1,200 destination and documentation fee

Any other company would have had enough news for one day with the across-the-board price drop announcements, but not Tesla. They also announced that they would be closing just about all of their stores and transitioning to online sales only, with the exception of only a few stores which will be converted to "galleries". That came to a surprise to me, since I just received an email from Tesla two days earlier asking for my support in their effort to increase the amount of Telsa stores in my home state, New Jersey.

Tesla currently has four locations in New Jersey, and that's all they are currently allowed to operate. The email stated that they are seeking support for a new bill that would allow Tesla to open ten more stores in the state. I received the message below in an email on February 26th, just two days before the announcement that they were closing all their stores:

Hi Tom --

Tesla’s goal is to accelerate the future of sustainable energy by educating consumers about our electric cars and energy products. We’re also working to make our purchase, delivery, and service processes as seamless as possible for customers in New Jersey.

As you may know, New Jersey state law currently limits the number of licensed locations Tesla can operate in State, which is a major impediment for current and potential Customers who don’t live in proximity to one of our four locations.

New Jersey Legislature is now considering two bills, Senate Bill S3493 and Assembly Bill A5097, that would lift this cap and allow Tesla to open 10 new store locations in New Jersey. This would allow us to deepen our investments throughout the state and create hundreds of local, well-paying jobs in a growing industry.

This legislation would make it easier for thousands of New Jersey consumers, you, to learn about and purchase Tesla products that directly serve the State’s clean energy, clean air, and greater environmental goals. To date, Tesla’s zero emission vehicles have prevented over 3.9 million tons of harmful greenhouse gas emissions globally.

Please assist us by letting your elected officials know that a sustainable future is important to you and that this bill will help us get there.


It's unclear why they sent this call to action, only to announce all store closings two days later. Did they have a sudden change of direction, or is this part of an unannounced plan? Either way, it's strange at the very least, and quite puzzling.

Tesla also moved three features from the Enhanced Autopilot option to the Fully Self-Driving option (Navigate on Autopilot, Autopark, Summon). They also shortened the name to just "Autopilot", and dropped the price from $5,000 to $3,000. The Full Self Driving option is available once again, but now costs an additional $5,000, up from the previous $3,000. They also discontinued the Model X Standard Range.

Was it a good idea to announce all these changes at the same time Tesla finally introduced the $35,000 Model 3?  Too many changes at once can confuse buyers, existing owners and investors. Is this chaos or is Tesla just executing the plan that had all along?

*Edit: I received this follow up email from Tesla last night. Evidently, they decided they needed to clarify their position on the previous email after the announcement that they will be closing their Tesla stores:

Dear New Jersey Tesla Supporter,

On behalf of the Tesla Policy Team, thank you for your support. Tesla made an important announcement yesterday (which you can read here) launching the $35k Model 3 and announcing upcoming changes to our sales approach. The $35k Model 3 is an incredible milestone for Tesla, and we thank you for all your support in achieving this milestone and driving our mission. Yesterday, we also announced that we are transitioning to an online sales model, one that many of you are already familiar with and have enjoyed. This shift is important because it enables us to make our vehicles even more affordable and accessible, accelerating the advent of sustainable energy.

We also want to be absolutely clear that Tesla is committed to our customers and the state of New Jersey. Although we are shifting our retail strategy, we are continuing to invest in and strengthen our service presence so that we can provide an even better ownership experience to you and other Tesla owners. This area will continue to expand as the Tesla family continues to grow.

We will certainly have new opportunities to use the policy making process to advance our mission, and when those opportunities arise, we will continue to count on your support.

Thank you, again, and please do not hesitate to contact me with any further questions or comments. Our team will keep you fully apprised of what you can expect as our company continues to grow and evolve.

Ryan Barnett, Tesla Policy Team
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