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:
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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:
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